RIO Y COMPAÑIA (SUCCESSOR TO RIO Y OLABARRIETA), PETITIONER VS. COURT OF APPEALS AND MANUEL REY, RESPONDENTS.

Rio y Compania

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, successor to Rio y Olabarrieta, brought an action
against Manuel Rey before the Court of First Instance of Palawan to
recover the sum of P16,811.89, plus 9 per cent interest thereon, as
well as to foreclose the deed of mortgage executed to guarantee the
loan.

Defendant filed a motion to dismiss on the ground of prescription,
but as the facts averred in the pleading do not support the plea, the
motion was denied. Thereupon, defendant filed his answer wherein he
reiterated his defense that plaintiff’s action has already prescribed.

After the parties had submitted their evidence, the court found that
on the basis of the facts proven, plaintiff’s action has already
prescribed, and, accordingly, dismissed the complaint. Plaintiff
appealed to the Court of Appeals. After due hearing, the Court of
Appeals affirmed the decision of the court a quo. The case is now before us on a petition for review.

The issues posed by petitioner are: (1) Who has the burden of proof
as to the claim of the statute of limitations in the instant case?; (2)
Is respondent Rey required to prove that he was “not a war sufferer”
because that is the essence of his defense of prescription? and (3) Is
petitioner Rio y Compania required to prove that respondent Rey was “a
war sufferer and war damage claimant?”

The pertinent facts as found by the Court of Appeals are: “The term
of the mortgage was for one year, to start from February 11, 1938, and
might be extended for one year more upon agreement of the parties. The
evidence fails to reveal an express agreement of the parties as to the
extension of the mortgage for another year. So, on February 11, 1939
the action to enforce the mortgage eventually accrued. Granting,
however, that it had been extended for one year more, which was the
only extension authorized by the contract, according to paragraphs 3
and 5 thereof, the action for foreclosure should have arisen on
February 11, 1940. From February 11, 1939 to April 10, 1954 when this
action was filed, fifteen (15) years, one (1) month and twenty-nine
(29) days had elapsed. From February 11, 1940 to April 10, 1954 there
is an expanse of fourteen (14) years, one (1) month and twenty-nine
(29) days. And if we subtract from this the three (3) years, four (4)
months and sixteen (16) days period, from March 10, 1945 to July 26,
1948, during which the moratorium law was in force, the ensuing
difference is ten (10) years, nine (9) months and thirteen (13) days.
Thus, even reckoning the period for the action to foreclose from
February 11, 1940, the present action was presented ten (10) years,
nine (9) months and thirteen (13) days after its accrual.”

It should be noted that the Court of Appeals, in the same manner as the court a quo, only deducted the short period of moratorium, consisting of 3 years 4 months and 16 days, as applied by this Court in Bachrach Motor Co., Inc. vs. Antonio Lejano, (105 Phil., 6; 56 Off. Gaz. [17] 3276) (citing therein a long line of similar decisions), and not the long
period which is applied if the debtor is a war sufferer or a war damage
claimant. And the court deemed it proper to make that deduction because
of its theory that it was incumbent upon petitioner to prove that
respondent was a war sufferer and petitioner failed to do so. Thus, the
following is the comment of the Court of Appeals on the matter:

“We believe that this is the rule applicable in the
instant case, as the evidence fails to disclose that “Rey had filed a
claim for war damage. We disagree with the proposition that Rey, to be
protected by the benefits of prescription, should have proven that he
was not a war sufferer. The Rio y Compania, appellant herein, invokes
the protection of the Moratorium Law and consequently, bears the burden
of proving that Rey had filed a claim for war damage and, therefore, no
action for any pecuniary obligation could have been filed against him
until after the decision in the case, of Rutter vs. Esteban (49 Off. Gaz., 1807).”

This finding is now assigned as error. Petitioner contends that
since respondent set up in his favor the defense of prescription he had
the burden of proof to establish that he was not a war sufferer or has
not filed any war damage claim, in order that petitioner may be
prevented from claiming the benefit of the long moratorium period. And
since respondent failed to do so, the presumption is that he was a war
sufferer, a circumstance which should be considered in favor of
petitioner.

We are constrained to agree to this contention in view of our ruling
in the case of Rio y Compania (successor to Rio y Olabarrieta) vs. Datu Jolkipli, (105 Phil., 525) wherein we said:

“Under the circumstances, it was incumbent upon the
defendant to plead and prove that he was not covered by the Moratorium
Law, Act 342, in order to establish that plaintiff’s action was barred
by prescription in all cases that may be established under the
complaint. The rule, on the authority of Lyon vs. Bertram, 20 How. (U.S.) 149, 15 Law Ed. 847, is stated by American Jurisprudence to be as follows:

‘A
plea of the statute (of limitations) can not be sustained which rests
upon a supposed state of facts which may not exist. It must be an
answer to any case which may be legally established under the
declaration. So where the statute imposed a bar on certain contracts
after three years and on others after two years, the plea of the
statute was held to be bad where it did not show that the contract in
question was of the latter class.’ (34 Am. Jur. 341, Sec. 431, note 8)

“The
defendant has not shown nor pleaded that he was not a war sufferer and
had not filed a war damage claim. While constituting negative
averments, they are of the essence of his contention that plaintiff’s
claim was barred, and hence the burden of proving them lay on
defendant-appellee (Rule 123, sec. 70.) * * *”

It was, therefore, incumbent upon respondent to prove that he was
not a war sufferer or a war damage claimant in order that petitioner
may not claim the benefit of the long moratorium period, and having
failed to do so, the logical conclusion is that he was, thus tolling
the period of prescription until May 18, 1953 when we declared
unconstitutional Republic Act 342. ^[1] As a consequence, we are persuaded to hold that petitioner’s action has not yet prescribed.

It appearing that neither the court of first instance, nor the Court
of Appeals, has made any finding as to how much is the amount actually
due the petitioner from respondent, there is need to remand this case
to the court of origin in order that this point may be determined, and
judgment rendered accordingly.

Wherefore, the decision appealed from is reversed. The case is
remanded to the lower court for further proceedings in line with this
decision. Costs against respondent Manuel Rey.

Bengzon, C. J., Padilla, Labrador, Concepcion, Barrera, Paredes, Dizon, Regala, and Makalintal, JJ,. concur.