PHILIPPINE NATIONAL BANK, PLAINTIFF-APPELLANT, VS. JUAN DELOSO, ET AL., DEFENDANTS-APPELLEES.

Philippine National Bank versus Deloso

The Case

This is an appeal on questions of law brought by the Philippine National Bank against Juan Deloso, Francisco Imperial, and Magno Jamito. The Bank sued to revive a money judgment it had won years earlier, and the defendants resisted on the ground that the action had already prescribed. The case matters because it fixes, with precision, when the ten-year period to revive a judgment begins to run, and because it settles that an extrajudicial demand does not interrupt that period. These are the two traps examiners set for students of prescription and civil procedure.

Procedural History

The original judgment was rendered by the Court of First Instance of Camarines Sur in an earlier civil case, ordering the three defendants to pay the Bank jointly and severally. That judgment was never executed within five years from its finality. The Bank then filed a second case in the same court for revival of the judgment, but that case was dismissed for lack of jurisdiction over the subject matter, the amount being within the original jurisdiction of the City Court of Naga under the law then in force.

The Bank accordingly filed a similar action for revival with the City Court of Naga. On motion of the defendants, the City Court dismissed it on the ground that the action was already barred by prescription, more than ten years having elapsed from the date the original judgment became final. The Bank's motion for reconsideration was denied. The Bank appealed the dismissal to the Court of First Instance of Camarines Sur, which likewise dismissed the appeal on the ground of prescription, counting from the finality of the judgment. After its motion for reconsideration was denied, the Bank came directly to the Supreme Court on questions of law.

Facts

On January 25, 1951, the Court of First Instance of Camarines Sur rendered judgment in the original civil case, ordering Juan Deloso, Francisco Imperial, and Magno Jamito to pay the Philippine National Bank, jointly and severally, 600 pesos plus interest, attorney's fees, and costs. For one reason or another, that judgment was not executed within five years from the date of its finality.

On June 28, 1960, the Bank filed an action for revival of the judgment with the same court. On September 30, 1964, that case was dismissed for lack of jurisdiction over the subject matter, because the amount involved fell within the original jurisdiction of the City Court of Naga under the statute that took effect on August 1, 1959.

On January 11, 1965, the Bank filed a similar action for revival with the City Court of Naga. That court dismissed the action on August 18, 1966, holding that it was barred by prescription, more than ten years having elapsed from the finality of the original judgment. The Court of First Instance affirmed on appeal, finding that the judgment sought to be revived became final and executory on February 26, 1951, or thirteen years, ten months, and fifteen days before the filing of the case with the City Court of Naga.

Issues

• Whether or not the complaint in the earlier revival case, which was dismissed for want of jurisdiction, may be considered a written extrajudicial demand that interrupted the running of the ten-year prescriptive period.
• Whether or not the ten-year period to bring an action for revival of judgment commences to run only from the expiration of the five-year period within which a judgment may be executed by mere motion.

Applicable Provisions

Article 1144 of the Civil Code provides:

Article 1144. The following actions must be brought within ten years from the time the right of action accrues: (3) Upon a judgment.

This is the provision that fixes the ten-year period for the revival action and supplies the ground for the dismissal.

Article 1152 of the Civil Code provides:

Article 1152. The period for prescription of actions to demand the fulfillment of obligations declared by a judgment commences from the time the judgment became final.

This is the decisive provision: it anchors the start of the ten-year period on the finality of the judgment, not on the lapse of the five-year execution period.

Article 1155 of the Civil Code provides:

Article 1155. The prescription of actions is interrupted when they are filed before the court, when there is a written extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor.

The Bank invoked this provision to argue that its earlier complaint interrupted prescription, and the Court rejects that reading for actions upon a judgment.

Section 6 of Rule 39 of the Revised Rules of Court provides:

Section 6. Execution by motion or by independent action. A judgment may be executed on motion within five years from the date of its entry or from the date it becomes final and executory. After the lapse of such time, and before it is barred by the statute of limitations, a judgment may be enforced by action.

The Bank read this provision as postponing the start of the ten-year period, a reading the Court rejects.

Ruling

On the first issue, the Court holds that the earlier complaint, even if treated as a written extrajudicial demand, could not have interrupted the prescription of the action to revive the judgment. Article 1155 refers to actions to collect a debt not based on a judgment. An extrajudicial demand or an acknowledgment makes sense only where the creditor's right rests on contract or on law, for such acts show that he has not slept on his rights. But where the right rests on a final and executory judicial decree, the creditor enforces it by writ of execution, and no demand or acknowledgment is needed. The Court adds that even under the old Code of Civil Procedure, the renovating effect of payment or written acknowledgment was limited to actions upon a contract, not to actions upon a judgment.

On the second issue, the Court holds that the ten-year prescriptive period runs from the date of finality of the judgment, not from the expiration of the five years within which the judgment may be enforced by mere motion. The Court adopts its earlier ruling, which gave three reasons. First, the execution provision must be read together with the prescription provision, so that after the five years the winning party may revive the judgment only so long as the ten years from the judgment has not expired. Second, the right to enforce the judgment begins the moment it becomes final, and the revival action is itself an action to demand that right. Third, to count ten years from the end of the five-year period would stretch the life of the judgment to fifteen years, contrary to the law. The Court notes that this doctrine has been consistently adhered to, so that it is now settled that the ten-year period commences from the date of finality of the judgment.

Doctrine

An action upon a judgment must be brought within ten years from the time the right of action accrues, and under Article 1152 that period commences from the time the judgment became final. It does not commence from the expiration of the five-year period within which the judgment may be executed by mere motion. To hold otherwise would extend the life of a judgment to fifteen years, which the law does not permit.

The interruption of prescription under Article 1155, whether by written extrajudicial demand or by written acknowledgment of the debt, applies to actions to collect a debt not based on a judgment. It does not apply to an action to revive or enforce a judgment, because the creditor's right rests on a final and executory judicial decree and is enforced by writ of execution.

Disposition

The Supreme Court affirmed the order of dismissal and imposed treble costs against the Philippine National Bank. The Bank lost.

Remember This

Memorize this line: the ten-year period to revive a judgment runs from the finality of the judgment, not from the end of the five-year execution period, and no extrajudicial demand interrupts it. Examiners use this case to test the interplay of Article 1144, Article 1152, and Article 1155 of the Civil Code with the rule on execution by motion.