"x x x.
The CA properly imposed a legal
interest upon the total monetary
award reckoned from the Entry of
Judgment on July 11, 2005 until full
satisfaction thereof, but the Court
modifies the rate indicated in the
assailed decision to conform to the
doctrine in Nacar.
In Gonzales, the Court stated that when there is a finding of illegal dismissal and an award of backwages and separation pay, "[t]he decision also becomes a judgment for money from which another consequence flows—the payment of interest in case of delay."38
Again in Gonzales, the Court instructed that legal interest is imposable upon the "total unpaid judgment amount, from the time x x x the decision (on the merits in the original case) became final."39
In the case at bar, the CA properly imposed the legal interest upon the total monetary award even if none was explicitly included in the fine print of LA Gambito’s decision and LA Flores’ order. The imposition of legal interest is not to be considered as an alteration of the final judgment to be executed. The legal interest is already deemed read into the decision.
As to the correct rate of imposable interest, the petitioners argue that only 6% and not 12% is mandated pursuant to the ruling in Nacar.
Nacaris instructive anent the rate ofinterest imposable upon the total adjudged monetary award, viz:
[T]he Bangko Sentral ng Pilipinas Monetary Board (BSP-MB), in its Resolution No. 796 dated May 16, 2013, approved the amendment of Section 240 of Circular No. 905, Series of 1982 and, accordingly, issued Circular No. 799,41 Series of 2013, effective July 1, 2013, the pertinent portion of which reads:
The Monetary Board, in its Resolution No. 796 dated 16 May 2013, approved the following revisions governing the rate of interest in the absence of stipulation in loan contracts, thereby amending Section 2 of Circular No. 905, Series of 1982:
Section 1. The rate of interest for the loan or for bearance of any money, goods or credits and the rate allowed in judgments, in the absence of an express contract as to such rate of interest, shall be six percent (6%) per annum.
Section 2. In view of the above, Subsection X305.1 of the Manual of Regulations for Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of Regulations for Non-Bank Financial Institutions are hereby amended accordingly.
This Circular shall take effect on 1 July 2013.
Thus, from the foregoing, in the absence of an express stipulation as to the rate of interest that would govern the parties, the rate of legal interest for loans or forbearance ofany money, goods or credits and the rate allowed in judgments shall no longer be twelve percent (12%) per annum– as reflected in the case of Eastern Shipping Linesand Subsection X305.1 of the Manual of Regulationsfor Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of Regulations for Non-Bank Financial Institutions, before its amendment by BSP-MB Circular No. 799 – but will now be six percent (6%) per annum effective July 1, 2013. It should be noted, nonetheless, that the new rate could only be applied prospectively and not retroactively. Consequently, the twelve percent (12%) per annumlegal interest shall apply only until June 30, 2013. Come July 1, 2013 the new rate of six percent (6%) per annum shall be the prevailing rate of interest when applicable.
x x x x
Nonetheless, with regard to those judgments that have become final and executory prior to July 1, 2013, saidjudgments shall not be disturbed and shall continue to be implemented applying the rate of interest fixed therein.42 (Some citations omitted and underscoring ours)
In Nacar, during the execution proceedings, the LA, NLRC and the CA did not impose a legal interestupon the total adjudged award. Thereafter, this Court granted the petition filed before it by the dismissed employee pleading for the imposition upon the monetary award of the legal interest, which the Court declared to be 12% per annumfrom the date of the Entry of Judgment on May 27, 2002 to June 30, 2013, and 6% per annum from July 1, 2013 until their full satisfaction.
Similarly, in the case of Florentino and Nilda, LA Gambito’s decision became final and executory on July11, 2005, during which time, the prevailing rate of legal interest was 12%. Note, however, that LA Gambito’s decision and subsequently, even LA Flores’ Order, dated August 22, 2006, made no explicit award of legal interest. As discussed above though, the imposition of the legal interest is already deemed read into the decision and order. For the same reason, the CA, in the herein assailed decision, expressly included the said interest in the computation.
In Nacar, and in the case before this Court now, the judgments finding that the employees were illegally dismissed became final and executory before July 1, 2013. In both cases too, the said judgments did not explicitly include the imposition of the legal interest upon the total adjudged award. In the case of Florentino and Nilda, it was the CA, which first expressly included the legal interest in the equation. In Nacar, this Court made the explicit inclusion and pegged the rate at12% from the date of the Entry of Judgment up to June 30, 2013, and at 6% from July 1, 2013 until full satisfaction thereof. The circumstances in the instant petition are similar to the foregoing, hence, Nacarfinds application. Consequently, the Court imposes upon the total adjudged award an interest of 12% interest per annum reckoned from July 11, 2005 until June30, 2013. The interest of 6% per annumis imposed from July 1, 2013 until full satisfaction of the judgment award.
x x x."
G.R. No. 211228 November 12, 2014
UNIVERSITY OF PANGASINAN, INC., CESAR DUQUE/JUAN LLAMAS AMOR/DOMINADOR REYES, Petitioners,
FLORENTINO FERNANDEZ and HEIRS OF NILDA FERNANDEZ, Respondents.