State Investment House v. The Honorable Court of Appeals

Summary

This case involved a dispute over the amount required to release pledged shares of stock. Spouses Rafael and Refugio Aquino pledged shares to secure loans from State Investment House, Inc. When their loan matured, State refused to release the shares unless they also paid another couple's unpaid loan. The trial court initially ruled respondents need only pay the principal without interest, finding they were not in delay since State prevented payment. The Court of Appeals affirmed this decision. However, the Supreme Court reversed, holding that even without delay, regular contractual interest continues to accrue until actual payment. Under Article 1256 of the Civil Code, mere tender of payment without consignation in court does not extinguish the obligation. The Court clarified that respondents must pay the P110,000 principal plus 17% annual interest to prevent unjust enrichment, while remaining exempt from penalty interest since they were not in default.