EDGARDO CARIAGA, ET AL., PLAINTIFFS AND APPELLANTS, VS. LAGUNA TAYABAS BUS CO., ET AL., DEFENDANTS.

Cariaga versus Laguna Tayabas Bus

The Case

This is a civil action for damages arising from a vehicular accident, brought by Edgardo Cariaga and his parents against the Laguna Tayabas Bus Company and the Manila Railroad Company. The case matters to a reviewee not for its facts about the collision but for a narrow and practical point of finality and execution: when the Supreme Court increases the compensatory damages awarded by the trial court but says nothing about interest on the increase, how is the judgment to be executed? The Court here clarifies its own final judgment, and in doing so teaches a rule every practitioner must know about the scope of an award of interest.

Procedural History

The case began in the Court of First Instance of Laguna. That court rendered judgment sentencing the Laguna Tayabas Bus Company to pay Edgardo Cariaga compensatory damages with interest at the legal rate from the filing of the complaint. It dismissed the claims for moral damages and attorney's fees, dismissed the parents' claim for compensatory damages, and absolved the Manila Railroad Company from the complaint and from the bus company's cross-claim. The bus company was also ordered to pay the costs.

On appeal, the Supreme Court increased the compensatory damages to 25,000 pesos and affirmed the appealed judgment in all other respects, with costs against the bus company. The plaintiffs then filed a Motion for Clarification, asking whether the increased amount of 25,000 pesos should be paid with interest. The Court initially denied the motion by minute resolution, but the defendant filed an answer to the motion, and because the parties held conflicting views on whether interest attached to the increased amount, the Court reconsidered its minute resolution and issued this clarification for the guidance of the lower court in executing the final judgment.

Facts

Edgardo Cariaga suffered injury for which he sued the bus company and the railroad company. After trial, the Court of First Instance of Laguna awarded him compensatory damages of 10,490 pesos, with interest at the legal rate from the date of the filing of the complaint. His claims for moral damages and attorney's fees, and his parents' claim for compensatory damages, were dismissed. The Manila Railroad Company was absolved.

On appeal, the Supreme Court raised the compensatory damages to 25,000 pesos and affirmed the judgment in all other respects. The Court did not state whether the increased amount would itself bear interest.

Because of this silence, the plaintiffs sought clarification, and the parties disagreed on whether interest ran on the increased damages, on the original amount, or not at all. The Court resolved the confusion by construing its own judgment.

Issues

• Whether or not the increased compensatory damages of 25,000 pesos awarded by the Supreme Court shall draw interest at the legal rate.
• Whether or not interest, if any, shall run on the original amount awarded by the trial court or on the amount by which the damages were increased.

Applicable Provisions

The decision does not quote any statutory provision. It construes the dispositive portion of the trial court's judgment, which awarded compensatory damages with interest at the legal rate. That award of interest, as affirmed, is the operative text the Court interprets:

The defendant, Laguna Tayabas Bus Company, is hereby sentenced to pay the plaintiff, Edgardo Cariaga, the sum of 10,490 pesos as compensatory damages with interest thereon at the legal rate from the date of the filing of the complaint.

This award of interest is the only interest the Court recognizes, and it attaches only to the original sum stated in the trial court's judgment.

Ruling

On the first issue, the Court held that no interest is awarded on the amount by which the compensatory damages were increased. Its reasoning rests on the exact terms of its own decision: the decision simply increased the compensatory damages from 10,490 pesos to 25,000 pesos, without providing that the increase shall also draw interest at the same rate as the original amount, and after increasing the award the Court affirmed the lower court's decision in all other respects. The Court stated:

Considering that our decision simply increased the compensatory damages from 10,490 pesos to 25,000 pesos, without providing that the increased shall also draw interest at the same rate as the original amount and considering further that after increasing the amount awarded as compensatory damages, we affirmed the lower court's decision in all other respects, our decision shall be construed as awarding no interest on the amount by which the compensatory damages were increased.

On the second issue, the Court held that interest runs exclusively on the sum of 10,490 pesos, as provided in the trial court's decision. The increase is a bare principal amount, and the silence of the judgment on interest for that increase means no interest was granted.

Doctrine

Interest is not presumed; it must be expressly granted in the judgment or provided by law. When an appellate court increases the compensatory damages awarded below but does not expressly extend the award of interest to the increased amount, the increase carries no interest. The interest awarded by the trial court continues to run only on the original sum stated in its judgment. A judgment is executed according to its exact terms, and what the judgment does not grant, the executing court cannot supply.

Disposition

The Court clarified its judgment: no interest is due on the increase, and interest at the legal rate runs exclusively on the original 10,490 pesos awarded by the trial court.

Remember This

The one line to memorize: an increase in compensatory damages carries no interest unless the judgment expressly says so, and interest runs only on the sum originally awarded. Examiners use this case to test the rule that interest must be expressly granted and that a judgment is executed strictly according to its terms.