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  • Case No. 52 Antonia A. Cabarroguis and Mamerto Cabarroguis, Plaintiff'S and Appellees, vs. TELESFORO B. VICENTE, Defendant and Appellant. Facts

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    Wendell Mirabel
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    Antonia Cabarroguis was injured in a jeepney accident and entered a compromise agreement with the owner, Telesforo Vicente, to pay her P2,500 in damages. Vicente paid P1,500 but did not pay the remaining P1,000. The agreement included a P200 penalty for late payment. Cabarroguis sued and won P1,200 plus interest in a lower court. Vicente appealed, arguing the penalty substitutes damages and interest under Article 1226. The Court of Appeals held that under Article 1226, the penalty substitutes damages and interest for the principal obligation. However, Cabarroguis was entitled to interest on the penalty amount since Vic

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    Case Digest

    Original Title

    51. Government v. Lim

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    Antonia Cabarroguis was injured in a jeepney accident and entered a compromise agreement with the owner, Telesforo Vicente, to pay her P2,500 in damages. Vicente paid P1,500 but did not pay the remaining P1,000. The agreement included a P200 penalty for late payment. Cabarroguis sued and won P1,200 plus interest in a lower court. Vicente appealed, arguing the penalty substitutes damages and interest under Article 1226. The Court of Appeals held that under Article 1226, the penalty substitutes damages and interest for the principal obligation. However, Cabarroguis was entitled to interest on the penalty amount since Vic

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    17 views2 pages

    Case No. 52 Antonia A. Cabarroguis and Mamerto Cabarroguis, Plaintiff'S and Appellees, vs. TELESFORO B. VICENTE, Defendant and Appellant. Facts

    Uploaded by

    Wendell Mirabel
    Antonia Cabarroguis was injured in a jeepney accident and entered a compromise agreement with the owner, Telesforo Vicente, to pay her P2,500 in damages. Vicente paid P1,500 but did not pay the remaining P1,000. The agreement included a P200 penalty for late payment. Cabarroguis sued and won P1,200 plus interest in a lower court. Vicente appealed, arguing the penalty substitutes damages and interest under Article 1226. The Court of Appeals held that under Article 1226, the penalty substitutes damages and interest for the principal obligation. However, Cabarroguis was entitled to interest on the penalty amount since Vic

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 2

    Case No.

    52
    ANTONIA A. CABARROGUIS and MAMERTO CABARROGUIS, plaintiff’s and
    appellees, vs. TELESFORO B. VICENTE, defendant and appellant.
    FACTS:
    Plaintiff, Antonia A. Cabarroguis, a registered nurse and midwife, sustained
    physical injuries as a result of an accident when the AC “jeepney” of which she was a
    passenger hit another vehicle at a street corner of Davao City. The injury caused her
    permanent partial disability to her right forearm. To avoid court litigation, Telesforo B.
    Vicente, owner and operator of the AC “jeepney” entered into a compromise agreement
    to pay Cabarroguis the sum of P2,500 which represents actual and compensatory,
    exemplary and moral damages. Defendant has paid a total of P1,500.00 leaving
    therefore, an unpaid balance of P1,000. The agreement also stipulates that failure to
    pay the balance within 60 days, he would pay an “additional amount of P200.00 as
    liquidated damages. Vicente, notwithstanding repeated demands, failed to pay. Spouses
    Cabarroguis filed a suit in the Municipal Court of Davao City, which rendered judgment
    in favor of the plaintiffs. The decision includes payment of P1,200.00 with interest at
    legal rate from the date of the filing of the complaint until full payment. Vicente
    appealed to the Court of Appeals citing Article 1226 of the new Civil Code, that in
    obligations with a penal clause, the penalty substitutes the indemnity for damages and
    payment of interest.
    ISSUE:
    Whether or not the penalty substitutes the indemnity for damages and payment
    of interest for obligations with a penal clause
    HELD:
    In obligations with a penal clause, as provided in Article 1226 of the new Civil
    Code, the penalty shall substitute the indemnity for damages and the payment of
    interests. The exceptions to this rule, according to the same article, are: (1) when the
    contrary is stipulated; (2) when the debtor refuses to pay the penalty imposed in the
    obligation, in which case the creditor is entitled to interest on the amount of the
    penalty, in accordance with Article 2209; and (3) when the obligor is guilty of fraud in
    the fulfilment of the obligation. Applying the law it is evident that no interest can be
    awarded on the principal obligation, the penalty of P200 agreed upon having taken the
    place of the payment of such interest and the indemnity for damages, the case not
    falling under any of the exceptions. However, in the case, it takes a different aspect
    with respect to the penalty attached to the principal obligation. It has been held that in
    obligations for the payment of a sum of money when a penalty is stipulated for default,
    both the principal obligation and the penalty can be demanded by the creditor.
    Defendant having refused to pay when demand was made by plaintiff, the latter clearly
    is entitled to interest on the amount of the penalty. It is well to observe that Article
    2210 of the new Civil Code also provides that in the discretion of the court, interest may
    be alleged upon damages awarded for breach of contract. This interest is recoverable
    from the time of delay, that is to say, from the date of demand, either judicial or
    extrajudicial.

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