UNDER THE GUIDELINES LAID DOWN IN NACAR V.

GALLERY FRAMES, WHEN THE JUDGMENT

OF THE COURT AWARDING A SUM OF MONEY BECOMES FINAL AND EXECUTORY, THE RATE
OF LEGAL INTEREST SHALL BE 6% PER ANNUM FROM SUCH FINALITY UNTIL ITS
SATISFACTION, THIS INTERIM PERIOD BEING DEEMED TO BE BY THEN AN EQUIVALENT TO
A FORBEARANCE OF CREDIT
Prior to Nacar and BSP Monetary Board Resolution No. 796 dated May 16, 2013, the rate of legal interest
was pegged at 12% per annum from finality of judgment until its satisfaction, "this interim period being
deemed to be by then an equivalent to a forbearance of credit." Judgments that have become final and
executory prior to July 1, 2013, shall not be disturbed and shall continue to be implemented applying the
rate of interest fixed therein (Victor S. Limlingan and Emmanuel A. Leyco vs. Asian Institute of
Management, Inc., G.R. Nos. 220481 & 220503, February 17, 2016).

x—————x

UNDER THE GUIDELINES LAID DOWN IN NACAR V. GALLERY FRAMES, WHEN THE JUDGMENT
OF THE COURT AWARDING A SUM OF MONEY BECOMES FINAL AND EXECUTORY, THE RATE
OF LEGAL INTEREST SHALL BE 6% PER ANNUM FROM SUCH FINALITY UNTIL ITS
SATISFACTION, THIS INTERIM PERIOD BEING DEEMED TO BE BY THEN AN EQUIVALENT TO
A FORBEARANCE OF CREDIT
Prior to Nacar and BSP Monetary Board Resolution No. 796 dated May 16, 2013, the rate of legal interest
was pegged at 12% per annum from finality of judgment until its satisfaction, "this interim period being
deemed to be by then an equivalent to a forbearance of credit." Judgments that have become final and
executory prior to July 1, 2013, shall not be disturbed and shall continue to be implemented applying the
rate of interest fixed therein (Victor S. Limlingan and Emmanuel A. Leyco vs. Asian Institute of
Management, Inc., G.R. Nos. 220481 & 220503, February 17, 2016).

Victor S. Limlingan and Emmanuel A. Leyco vs. Asian Institute of Management, Inc.
G.R. Nos. 220481 & 220503, February 17, 2016
Leonen, J.

FACTS:
A Complaint for "illegal suspension, non-payment of salaries, deprivation of medical benefits, life
insurance and other benefits, damages and attorney's fees" was filed by Limlingan and Leyco against
AIM. In the Decision dated February 26, 2008, LA Menese declared that Limlingan and Leyco's
suspension was illegal and ordered AIM to pay the salaries and benefits withheld during the
suspension, as well as 10% of the amount for attorney's fees. Limlingan and Leyco and AIM filed their
respective MRs, which were denied by NLRC. Both parties appealed the Commission's Resolution to
the CA through certiorari.

On May 4, 2010, the CA promulgated the Decision modifying the findings of the NLRC by deleting the
penalty of suspension and instead, imposing the penalty of formal reprimand on petitioners. The
parties filed their respective PFR before this court. This court denied with finality the separate MRs of
both parties. The CA's May 4, 2010 Decision in CA-G.R. SP No. 106714 then became final and
executory on July 25, 2011.

In G.R. No. 220481, Limlingan and Leyco raise the lone issue of whether they are entitled to interest
at the rate of 12% per annum computed from the finality of the CA' May 4, 2010 Decision (or on July
25, 2011) up to June 30, 2013, and 6% per annum from July 1, 2013 until full satisfaction of the award.
Limlingan and Leyco argue that the CA erred when it ruled that they were only entitled to interest at
the rate of 6% per annum from the finality of the May 4, 2010 Decision of the CA until full satisfaction
of the award.

In G.R. No. 220503, AIM claims that the award of attorney's fees was removed from the LA's Decision
when the NLRC promulgated its Decision dated July 4, 2008 modifying the award of the LA. There
was also no award of attorney's fees in the CA's May 4, 2010 Decision. Nowhere in the said Decisions
can be found any award of attorney's fees. Indeed, 'an award of attorney's fees without justification is
a conclusion without a premise, its basis being improperly left to speculation and conjecture' [.]" In
assailing the CA Decision, AIM argues that "to allow the inclusion of [such] . . . award would be to
disregard the rule on strict adherence to and the immutability of judgment."

VILLAROMAN 1
ISSUES:
1. Did CA erred in awarding legal interest at the rate of 6% per annum from the date the CA’s
May 4, 2010 Decision in CA-G.R. No. 106714 became final until its full satisfaction?
2. Are Limlingan and Leyco entitled to attorney's fees?

HELD:
1. YES. The legal interest imposed is but a consequence of AIM's participation in prolonging the
proceedings between the parties. That the amount respondents shall now pay has greatly
increased is a consequence that it cannot avoid as it is the risk that it ran when it continued
to seek recourses against the LA's decision.

With regard to the proper rate of legal interest, Nacar laid down the guidelines for the
imposition of legal interest: To recapitulate and for future guidance, the guidelines laid
down in the case of Eastern Shipping Lines are accordingly modified to embody BSP-
MB Circular No. 799, as follows:
I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts,
delicts or quasi-delicts is breached, the contravenor can be held liable for damages.
The provisions under Title XVIII on "Damages" of the Civil Code govern in
determining the measure of recoverable damages.
II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is
imposed, as follows:
a. When the obligation is breached, and it consists in the payment of a sum of
money, i.e., a loan or forbearance of money, the interest due should be that
which may have been stipulated in writing. Furthermore, the interest due shall
itself earn legal interest from the time it is judicially demanded. In the absence
of stipulation, the rate of interest shall be 6% per annum to be computed from
default, i.e., from judicial or extrajudicial demand under and subject to the
provisions of Article 1169 of the Civil Code.
b. When an obligation, not constituting a loan or forbearance of money, is
breached, an interest on the amount of damages awarded may be imposed at
the discretion of the court at the rate of 6% per annum. No interest, however,
shall be adjudged on unliquidated claims or damages, except when or until the
demand can be established with reasonable certainty. Accordingly, where the
demand is established with reasonable certainty, the interest shall begin to run
from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code),
but when such certainty cannot be so reasonably established at the time the
demand is made, the interest shall begin to run only from the date the judgment
of the court is made (at which time the quantification of damages may be deemed
to have been reasonably ascertained). The actual base for the computation of
legal interest shall, in any case, be on the amount finally adjudged.
c. When the judgment of the court awarding a sum of money becomes final and
executory, the rate of legal interest, whether the case falls under paragraph 1 or
paragraph 2, above, shall be 6% per annum from such finality until its
satisfaction, this interim period being deemed to be by then an equivalent to a
forbearance of credit.

And, in addition to the above, judgments that have become final and executory
prior to July 1, 2013, shall not be disturbed and shall continue to be implemented
applying the rate of interest fixed therein. (Emphasis in the original, citation
omitted)

On July 25, 2011, the CA's May 4, 2010 Decision became final and executory and was
recorded in the Book of Entries of Judgments. Prior to Nacar and BSP Monetary Board
Resolution No. 796 dated May 16, 2013, the rate of legal interest was pegged at 12% per
annum from finality of judgment until its satisfaction, "this interim period being deemed to be
by then an equivalent to a forbearance of credit."

VILLAROMAN 2
 Similar to this case, Nacar was already in the execution stage and the resolution awarding
backwages and separation pay had attained finality prior to the issuance of BSP Resolution.
Applying the guidelines discussed above, this court in Nacar imposed the legal interest of
12% per annum of the total monetary awards, computed from finality of this court's 2002
resolution to June 30, 2013 and 6% per annum from July 1, 2013 until their full satisfaction.

Based on Nacar and the above discussion, we grant Limlingan and Leyco's Petition as to the
modification of the legal rate of interest. Limlingan and Leyco are entitled to legal interest at
the following rates: 12% per annum computed from July 25, 2011, the date of the finality
of the CA's May 4, 2010 Decision, up to June 30, 2013, and 6% per annum from July 1,
2013 until full satisfaction of the award.

2. YES. The NLRC pointed out that the LA's February 26, 2008 Decision awarded 10%
attorney's fees to Limlingan and Leyco. AIM, however, limited its appeals to the issues of
illegal suspension, "reduction of the suspension period imposed and the award of nominal
damages." The issue as to Limlingan and Leyco's entitlement to attorney's fees already
attained finality. Issues not raised on appeal cannot be disturbed.

Moreover, in Aliling v. Feliciano, et al., this court explained the reason for awarding attorney's
fees: Petitioner Aliling is also entitled to attorney's fees in the amount of ten percent (10%) of
his total monetary award, having been forced to litigate in order to seek redress of his
grievances, pursuant to Article 111 of the Labor Code and following our ruling in Exodus
International Construction Corporation v. Biscocho, to wit: It is settled that in actions for
recovery of wages or where an employee was forced to litigate and, thus, incur expenses to
protect his rights and interest, the award of attorney's fees is legally and morally justifiable.
Attorney's fees may be awarded when a party is compelled to litigate or to incur expenses to
protect his interest by reason of an unjustified act of the other party.

VILLAROMAN 3