Hermojina Estores v. Spouses Arturo

Summary

This case involves a conditional deed of sale where the seller failed to fulfill contractual conditions despite receiving P3.5 million from the buyers. The Supreme Court held that interest may be imposed even without contractual stipulation under Article 2210 of the Civil Code when there is breach of contract. The Court ruled that the seller's withholding of money constituted forbearance of money, warranting 12% annual interest from the date of demand. The case established that arrangements where parties part with money pending fulfillment of conditions can be considered involuntary loans subject to 12% interest rate. Attorney's fees were awarded as the buyers were compelled to litigate to protect their interests, but reduced to P50,000.00 as reasonable compensation.