CASIANO SALADAS, PLAINTIFF AND APPELLANT, VS. FRANKLIN BAKER COMPANY, DEFENDANT AND APPELLEE.

This is an appeal, taken by plaintiff Casiano Saladas, from an order of
the Court of First Instance of Rizal dismissing the above-entitled
case, upon the ground that his cause of action is barred by the statute
of limitations.

It appears that said plaintiff was an
employee of defendant Franklin Baker Company from December 7, 1949 to
June 2, 1952, when he was dismissed. Subsequently, he filed with the
Wage Administration Service of the Department of Labor a claim for
overtime services allegedly rendered during said period, and for which
said office found him, on August 4, 1953, to be entitled to collect
P3,799.52. In a letter of said office dated October 27, 1954, payment
thereof was demanded from the defendant, which, however, did not heed
the demand. Hence, on November 23, 1954, plaintiff instituted Civil
Case No. Q-1299 of the Court of First Instance of Rizal, Q. C. against
the defendant, for the recovery of said sum. The case having: set for
hearing, plaintiff filed, on January 5, 1956, through the Chief of the
Prosecution Panel, Regional Office No. 1, Department of Labor, a motion
for continuance, upon the ground that prosecutor assigned to handle the
case and familiar with the facts therein had suddenly departed for the
Visayas for some important matters and would not be available on or
before January 15, 1956. This motion was denied and the case
dismissed—presumably without prejudice—by an order, dated January 9,
1956. A year and a half later, or on July 18, 1957, plaintiff filed the
present action for the recovery of the same overtime compensation
already adverted to. In an amended answer, seasonably filed by the
defendant, it alleged, among other special defenses, that plaintiff’s
cause of action had already prescribed. After a preliminary hearing on
this particular defense, the lower court issued the order appealed
from, dismissing the case as above stated. Hence, this appeal by
plaintiff.

The issue is whether his claim for overtime
services allegedly rendered from December 7, 1949 to June 2, 1952 is
barred by the statute of limitations. Plaintiff maintains, and
defendant does not deny, that at the time of the rendition of said
services, and for several years subsequently thereto, the former
had—pursuant to our decision in Flores vs. San Pedro, 102
Phil., 44; 56 Off. Gaz. (31) 4918—six (6) years, from the accrual of
his cause of action, within which to sue for the recovery of overtime
compensation, upon the assumption, evidently, that the services in
question were rendered under an oral contract. It appears, however,
that on June 22, 1957, the President approved House Bill No. 6718,
which thereby became Republic Act No. 1993, amending Commonwealth Act
No. 444, otherwise known as the Eight Hour Labor Law, to read as
follows:

“Sec 7-A. Any action to enforce
any cause of action under this Act shall be commenced within three
years after the cause of action accrued, otherwise such action shall be
forever barred: Provided, however, That actions already commenced before the effective date of this Act shall not be affected by the period herein prescribed.”

Pursuant to Section 2 of said Republic Act No. 1993, the same took
effect upon its approval, or on June 22, 1957. Thus, the statute of
limitations of action for the recovery of overtime compensation has
been reduced from six (6) years (when an oral contract is involved) to
three (3) years after the accrual of the cause of action. Plaintiff
asserts that Republic Act No. 1993 should be construed prospectively
land, hence, is inapplicable to the present case, his cause of action
having accrued prior to its enactment. However, the proviso in the
above-quoted Section 7-A excluding from its operation “actions already
commenced before the effective date” thereof, indicates the intent to
apply it to all actions instituted thereafter—like the one at
bar—regardless of the time of accrual of the cause of action.

It is next urged by the plaintiff that, since his cause of action
accrued on June 2, 1952, the period within which he could sue the
defendant under Republic Act No. 1993, expired on June 2, 1955, thereby
completely stripping him, upon its approval on June 22, 1957, of any and all remedies
existing under the laws in force prior thereto, and that, to this
extent said Republic Act No. 1993 is unconstitutional, as a denial of
due process and an impairment of contractual obligation. As stated in
the American Jurisprudence:

“* * * it is firmly established that when a new limitation is made to apply to existing nights or causes of action, a reasonable time must be allowed before it takes effect
in which such rights may be asserted or in which suit may be brought on
such causes of action, and that a limitation statute is void if the
period allowed is unreasonably short. * * * statutes of limitation
affecting existing rights are not unconstitutional if a reasonable time is given for the enforcement of the right before the bar takes effect.

* * * * * * *

“Unless
forbidden by the State Constitution, the legislature may
constitutionally shorten the periods of limitation fixed by previously
existing statutes, and make the amendment applicable to existing causes
of action, provided a reasonable time is left in which such actions may be commenced.
The question as to what shall be considered such a reasonable time is
for the determination of the legislature, and is in no sense a judicial
question. Unless the time allowed is so manifestly insufficient that it
becomes a denial of justice, the court will not interfere with the
legislative discretion.

“The reasonableness of each
limitation prescribed by a statute shortening the period of limitation
must be separately adjudged in the light of the circumstances
surrounding the class of cases to which it applies, and if the time is
reasonable as regards the class, it will not be deemed unreasonable
because it may operate harshly in some particular or exceptional
instance. * * *.” (34 Am. Jut. pp. 29-30, 33-34; italics ours.)

The rule is set forth in the Corpus Juris Secundum in the following language:

“As to existing causes of action, a statute of limitations must afford a reasonable time for the commencement of an action before the bar takes effect.

* * * * * * *

“Unless
forbidden by constitutional restrictions, the legislature may shorten
the period of limitation even as to existing causes of action, provided a reasonable time is given for the commencement of an action before, the bar takes effect.
In determining the reasonableness of a statute shortening the period of
limitation as to existing causes of action, the period of time between
the passage of the statute and its effective date may be considered.”
(53 C.J.S., pp. 906, 907-908; italics ours.)

Defendant does not assail the soundness of these views, but it
maintains that plaintiff had had a reasonable time within which to
bring his action, because—in the words of defendant’s counsel—”Republic
Act No. 1993 was passed by Congress of the Philippines on May 7, 1957
and took effect only on June 22, 1957, when it was approved by the
President”, so that plaintiff had had forty-five (45) days within which
to file his complaint herein. Indeed, in the cases of Lehigh Valley R.
Co. vs. Comar (151 Fed. 560, 561), Cuminghan et al vs. Commonwealth, et al. (180 N.E., 147-148) and Steele vs.
Gana (123 S. W., 522-523), cited by defendant in support of its
pretense, the constitutionality of a statute shortening the period of
limitation for pre- existing causes of action was upheld upon the
ground that the creditors concerned had had a reasonable period,
ranging from thirty (30) days to ninety (90) days, from the “passage”
of the “Act” to its effective date, within which to sue their
respective debtors. What Congress of the Philippines passed on May 7,
1957, was, however, House Bill No. 6718, not Republic
Act No. 1993. At that time, there was no such Republic Act No. 1993,
which came into existence only on June 22, 1957, upon the approval of
said House Bill No. 6718 by the President.

The cases cited
by the defendant are good authority with respect to legislative
enactments that become effective sometime after they have become part
of the law of the land, with or without executive approval, like, for
instance, the Civil Code of the Philippines, which was approved by the
President on June 18, 1949, but did not take effect until one year
after its publication in the Official Gazette. In other words, the
doctrine laid down in said cases is irrelevant when the effectivity of
the law is simultaneous with the acquisition of such status, although
the bill paving the way therefor was passed prior thereto. Indeed, the
reasonable time essential to meet the demands of due process must be
given by the “statute”, not by a “bill”, which is not, as yet, a law,
and, hence, can grant nothing. Besides, a creditor whose period to sue
under existing laws is sought to be extinguished by a bill passed by
Congress, to take effect upon its approval by the President, may file
his complaint at any time before such approval, not because the bill gives him such opportunity, but despite the legislative intent to the contrary. The action filed by him in the intervening period would be prompted by the desire, not to abide by the provisions of the bill, but to avoid its operation, if not defeat its purpose. As regards bills of this nature the settled rule is:

“An existing right of action can not be taken away by legislation shortening
the period of Legislation to a time which has already run; it is not
within the power of the legislature to cut off an existing remedy
entirely, since this would amount to a denial of justice. * * *.” (34 Am. Jur. p. 29; italics ours.)

* * * * * * *

“* * * a statute which declares that a period lapsed shall bar an action upon a contract is an arbitrary destruction of contractual rights, and therefore, unconstitutional, as would also be a statute which practically denied a party the right to sue on an existing cause of action, by shortening the period of limitations without leaving a reasonable, time thereafter in which to bring the action.” (34 Am. Jur. p. 34; italics ours.)

“*
* * If the statute operates immediately to cut off the existing remedy,
or within so short a time as to give the party no reasonable
opportunity to exercise his remedy, then the retroactive application of
it is unconstitutional as to such party.

* * * * * * *

“* * * If an action accrued more than the limited time before the statute was passed, a literal interpretation of the statute would have the effect of absolutely barring such action at once; such an intent would be constitutional * * *.” (53 C.J.S., pp. 906-907, 916; italics ours.)

In such event, however, “it has been held that the statute will not be declared unconstitutional or void for that reason, but the courts will permit the action to be brought
within such time as may be found to be reasonable”. (53 C.J.S. 907;
italics ours.) Inasmuch as the case at bar was filed on July 18, 1957,
or less than a month, after the approval and effectivity of Republic
Act No. 1993, we are of the opinion that plaintiff was reasonably
diligent in pursuing the judicial enforcement of his claim, and that,
accordingly, the present action should not be deemed barred by Republic
Act No. 1993.

Defendant argues that, as held in Flores vs. San Pedro, supra,
the cause of action for overtime compensation accrues “at the end of
each regular pay period”; that plaintiff having worked on the basis of
a monthly salary, his cause of action for overtime compensation accrued
at the end of the month in which the overtime services were rendered;
and that, consequently, when this case was instituted on July 18, 1957,
plaintiff’s right to sue for overtime work rendered over six (6) years
prior thereto, or from December 7, 1949 to July 18, 1951, inclusive,
was already barred by the statute of limitations. Upon the other hand;
plaintiff alleges that said period of prescription should be deemed
suspended from October 27, 1954—when payment of the overtime
compensation was demanded in writing from the defendant—to February 9,
1956, when the order of dismissal of Civil Case No. “-1299 became
final, or for a period of one (1) year, three (3) months and fourteen
(14) days. However, defendant relies upon Peralta vs. Alipio,
97 Phil., 719, for the proposition that said Civil Case No.—1299 did
not interrupt the aforementioned period of prescription.

The
Peralta case is not in point. The debtor therein invoked Article 1946
of the Civil Code of Spain, pursuant to which “the service of summons *
* * shall not cause interruption * * * if the plaintiff should * * *
permit the proceedings to lapse * * *”, whereas the creditor relied
upon Article 1155 of the Civil Code of the Philippines, providing that:

“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.”

“Neither
contention” was held by this Court to be “correct” for “as the sale of
the land” involved in the Peralta case “took place before the New Civil
Code came into effect” or on August 1, 1947—”the statute of limitations
applicable is that contained in the Code of Civil Procedure (Act 190)
(Article 2258, New Civil Code)”. We further declared in said case that
the “Code of Civil Procedure (Act No. 190) contains no specific
provision on the suspension or interruption of the running of the
period of prescription by the institution of an action”; that Section
49 of said Code, reading:

“Saving in other cases.—If, in an action
commenced, or attempted to be commenced, in due time, a judgment for
the plaintiff be reversed, or if the plaintiff fail otherwise than upon
the merits, and the time limited for the commencement of such action
has, at the date of such reversal or failure, expired, the plaintiff,
or, if he die and the cause of action survive, his representatives, may
commence a new action within one year after such date, and this
provision shall apply to any claim asserted in any pleading by a
defendant.”

“indicates that the principle of interruption of the period of
limitations was not adopted in our statute” (referring to Act No. 190);
and that for this reason, in Oriental Commercial Co. vs. Jureidini (71 Phil., 25), Conspecto vs. Fruto (31 Phil., 144), and Santos vs.
Vera (69 Phil., 712), it was held “that the filing of an action within
the prescriptive period, if the plaintiff desists in its prosecution,
does not suspend the running of the statute.”

In other words, the Peralta case was decided pursuant to an
inference drawn from section 49 of the old Code of Civil Procedure, it
being the law in force when the transaction involved therein took place
years before the enactment and effectivity of the Civil Code of the
Philippines, which was not applied. The doctrine therein laid down is
not controlling in the case at bar, for plaintiff herein was dismissed
after the effective date of the Civil Code of the Philippines, which
specifically and expressly provides in Article 1155 thereof for the
interruption of the period of prescription, in consequence of either
the filing of suit, or of a written extrajudicial demand or a written
acknowledgment of the debt. Moreover, in the Peralta case, we said that
“* * * there is a firmly established rule in many American states that
the commencement of the suit prior to the expiration of the applicable
limitation period interrupts the running of the statute as to all
parties to the action”, which “rule is similar to that contained in
Article 1150 of the New Civil Code”, although “this principle * * *
does not appear in Act 190, our old statute of limitations, which is
taken from Ohio.” Thus, we have, in fact, acknowledged that, in cases
falling under the provisions of the Civil Code of the Philippines, the
period of prescription is suspended by the aforementioned acts or
events specified in said Article 1155 thereof.

The next question for determination is whether plaintiff may invoke
such provision, as regards the overtime services allegedly rendered by
him from December 7, 1949, to August 30, 1950, when the Civil Code of
the Philippines became effective. It should be noted that said Code was
already part of our laws at that time, it having been approved by the
President on June 18, 1949. At any rate, Article 2258 thereof provides:

“Actions and rights which came into being but were
not exercised before the effectivity of this Code, shall remain in full
force in conformity with the old legislation; but their exercise,
duration and the procedure to enforce them shall be regulated by this
Code and by the Rules of Court. If the exercise of the right or of the
action was commenced under the old laws, but is pending on the date
this Code takes effect, and the procedure was different from that
established in this new body of laws, the parties concerned may choose
which method or course to pursue.”

Plaintiff’s right of action for overtime services from December 2,
1949 to August 30, 1950 “came into being”, but was “not exercised
before the effectivity” of the Civil Code of the Philippines. Besides,
the aforementioned Civil Case No. Q-1299 was neither “pending on the
date” said Code took effect, nor “commenced under the old laws.”
Pursuant to the first sentence of the above-quoted Article 2258, the
“exercise duration and * * * procedure to enforce” plaintiff’s right of
action for the period preceding the effectivity of said Code, but after
the same had became part of our statutes, “shall be regulated” by the
same “Code and by the Rules of Court.” Inasmuch as the interruption of
the prescriptive period established in Article 1155 of our Civil Code
affects the “exercise” and, “duration” of the aforementioned right of
action, it follows, that plaintiff is entitled to the benefits of said
provision, insofar as the overtime services allegedly rendered, not
only from August 30, 1950 to June 2, 1952, but, also, from December 7,
1949 to August 29, 1950.

Adding to the six (6) years within which an action based upon an
oral contract may be brought, the period of interruption thereof in the
case at bar—which, as indicated above, lasted one (1) year, three (3)
months and fourteen (14) days—the result is that plaintiff is not
barred from suing for overtime services rendered from April 1, 1950 to
June 2, 1952.

Wherefore, the order appealed from is accordingly modified and the
records remanded to the lower court for further proceedings, not
inconsistent with this decision, with the costs of this instance
against defendant-appellee, Franklin Baker Company. It is so ordered.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Barrera, and Gutierrez David, JJ., concur.

Reyes, J.B.L., and Endencia, JJ., took no part.