CORPORATION, VS. AND J. L. DUMATOL REALTY AND DEVELOPMENT

Ruling

accordingly reimposed on a reduced rate of one percent (1%) interest per month or twelve percent (12%) per annum. With respect to the six percent (6%) interest per annum imposed as damages, we disallow the same for lack of legal basis. As correctly pointed out by the Court of Appeals, the contracts to sell do not provide for a six percent (6%) interest on the unpaid principal and accumulated penalty and interest charges. The interest was raised for the first time on appeal as a claim for twelve percent (12%) interest which was subsequently reduced to six percent (6%) by the HLURB. In disallowing the interest, we quote with approval the observation of the appellate court [15] - x x x x We hold that there is no legal basis for its imposition. It is a basic legal principle that parties may not raise a new cause of action on appeal x x x x This matter was raised for the first time on appeal as a claim for 12% interest which was subsequently reduced by the HULRB Commissioners to 6% per annum. Respondents ( petitioner herein ) never made a counterclaim for these amounts in their answer and position paper during the proceedings at the arbiter's level x x x x Neither can we find statutory justification for the imposition of the six percent (6%) interest in Art. 1226 [16] of the Civil Code. An obligation with a penal clause is one that contains an accessory undertaking, primarily intended to induce faithful performance of the principal prestation. Such cannot be true in this case because there is no stipulation in the contracts to sell imposing the six percent (6%) interest as penalty for the non-performance of the contractual obligations. The Court of Appeals next invokes Art. 2212 of the Civil Code - Interest due shall earn legal interest from the time it is judicially demanded, although the obligation may be silent upon this point. Nonetheless, the court a quo deleted the six percent (6%) legal interest in view of the failure of petitioner to comply with the requirement of judicial demand. We recall that the matter of the six percent (6%) interest was not demanded by petitioner in its counterclaim but was imposed only at the instance of the HLURB in its decision on appeal. Apropos the fourth issue, we do not agree with the appellate court that respondent DUMATOL is entitled to actual damages for unrealized profits. The sworn affidavit of Mr. Edilberto Bravo shows that he offered to buy for a definite price two (2) condominium units from respondent. The sale did not materialize however when Mr. Bravo withdrew his offer after perusing petitioner's letter dated 16 November 1990 for fear of getting involved in a litigation over the units. A cursory reading of the letter however will show that it contains basically a mere confirmation of an agreement by both parties during a meeting the previous day for the settlement of the total account balance. If indeed damages were sustained by respondent as a result of the aborted sale, it was not directly attributabl