LUZON SURETY COMPANY, INC., PETITIONER, VS. INTERMEDIATE APPELLATE COURT, AND EUGENIA G. PUYAT, GIL G. PUYAT, JR., ANTONIO G. PUYAT, VICENTE G. PUYAT, VICTOR G. PUYAT, JESUS-PUY…

This is a petition for review of the decision and resolution of
the then Intermediate Appellate Court, now the Court of Appeals, in AC-G.R. No.
03693, which respectively dismissed the petitioner’s appeal by ruling that the
prescription of an action is not counted from the expiration of the five-year
period within which the judgment may be enforced by a mere motion but from the
finality of that judgment and denied the motion for reconsideration.

The facts of the case are not in dispute and are briefly
summarized by the appellate court as follows:

“In Civil Case No. 59506 of the Court of First Instance of
Manila, entitled ‘Luzon Surety Co., Inc., v. Material Distributors (Phil.),
Inc., et al.’, judgment was rendered against the defendants, including Gil
Puyat, for the principal sum of P20,000.00 with interest at the rate of 12% computed and compounded quarterly from June 25, 1958, and the
further sum of P3,608.00 representing premiums and stamps.  The judgment became final on April 13, 1967,
but was not enforced.

“Within the prescribed period, Civil Case No. 93268 was
instituted to revive the
judgment in Civil Case No. 59506.  On May
24, 1974, judgment was rendered therein of which the following is the dispositive portion:

“’WHEREFORE, judgment is hereby rendered ordering the
defendants, jointly and severally, to
pay the plaintiff the sum
of P20,000.00, with interest at the rate of 12% per annum, computed and
compounded quarterly, from June 25, 1958 until fully paid; plus the further sum
of P3,608.00, representing unpaid premiums and stamps on the surety bond, with interest at the legal rate from
the date of the filing of the
complaint in Civil Case No. 59506 on January 11, 1965 until full payment; and
the costs of suit in both instances.  On the crossclaim, cross?defendants
Material Distributors (Phil.), Inc., and Lope Sarreal are hereby ordered
to reimburse the defendant and cross-claimant Gil J. Puyat for whatever sums the latter may be
held liable or compelled to pay the plaintiffs.’ (pp. 29-30, Annex
“J”, Original Record on Appeal).’

“On March 28, 1981 Gil Puyat died.  On September 1, 1982, a claim against the
estate of Gil Puyat was filed in Sp. Proc. No. Q-32291 of the Court of First
Instance of Rizal, Branch XVIII, in Quezon City, for the principal sum of P178,507.76, including interests, unpaid
premiums and stamps, and attorney’s fees and costs of suits, as of June 25, 1982.

“The Administrators oppose the claim for the reason that it is
unenforceable and barred by laches for no steps were taken by the claimant to
secure a writ of execution against
defendant Gil Puyat during his lifetime to enforce the judgment in Civil Case
No. 59506 or Civil Case No. 93268.

“On November 8, 1983, the Regional Trial Court of Quezon City, Branch LXXXVIII, promulgated its judgment dismissing the case.”
(pp. 25-26, Rollo).

xxx                                        xxx                                           xxx

Upon appeal by the petitioner, the then Intermediate Appellate
Court affirmed the lower court’s decision and dismissed the appeal.  The appellate court quoted with approval the
following findings and conclusions of the lower court, to wit:

“After a thorough evaluation of the record, We can add nothing
to what His Honor, the trial judge, has stated in the decision appealed from
which We hereby give Our wholehearted
imprimatur:

“‘The Court is of the view that the claim cannot be sustained
and must be dismissed.  Judgments may be
executed on motion within five years from the day it becomes final and
executory; after the lapse of such date and before its barred by the statute, judgments may be enforced by
action.  (Sec. 6, Rule 39, Rules
of Court.) The prescriptive period for enforcement of judgments is ten years.  (Art. 1144, Civil Code).

“’The Court is of the view that the judgment-creditor is only
entitled to revive the judgment only once. 
After the expiration of five years from the date a judgment has become
final the judgment is reduced to a mere right of action in favor of the
prevailing party.  The period of ten
years should be computed not from the finality of the judgment in Civil Case
93268 but rather of Civil Case 59506 which became final on April 13, 1967.  This judgment would have prescribed on April 30,
1977.  However, this judgment was revived
by the decision of the Court of First Instance in Civil Case 93268.  This latter decision only suspended the
running of the second five years contemplated in Sec. 6, Rule 39.  The only effect of the filing of Civil Case
93268 was to suspend the running of the statute of limitation for the
enforcement of judgment.  Therefore, from
the time that the judgment in Civil Case 93268 became final and executory the
claimant had only five years to enforce that judgment by motion.  When this claim was filed on September 1,
1982, more than seventeen years had elapsed from the time judgment in Civil
Case 59506 became final and more than five years after the finality of its
revived judgment in Civil Case 93268. 
Clearly, the right of claimant to satisfy the original judgment had long prescribed).’

“This Court has held in Talbo, et al., v. Laprodes, et al., 70
O.G. No. 39, September 30, 1974, citing Philippine National Bank v. Deloso, et
al., G. R. No. L-28201, March 30, 1970, 32 SCRA 266, that the prescription of
an action is not counted from the expiration of the five-year period within
which the judgment may be enforced by a mere motion but from the finality of
that judgment.” (pp. 27-28, Rollo).

The petitioner takes exception to these conclusions of the
appellate court.  It opines that the
period of ten (10) years prescribed in the statute of limitations should be
counted not from the date of the finality of the original judgment but from the
date of the finality of the revived
judgment.  Therefore, the petitioner
states that its action to claim under the revived judgment in Civil Case No.
93268, filed on September 1, 1982, was well within the ten-year prescriptive
period, this revived judgment having attained its finality in 1974.

The crux of the controversy lies in the interpretation of Article
1144(3) of the New Civil Code in relation to Section 6 of Rule 39 of the Rules
of Court.  Article 1144(3) provides:

“Art. 1144.  The
following actions must be brought within ten years from the time the right of
action accrues.

xxx                                        xxx                                           xxx

“3.  Upon
judgment.”

while section 6 of Rule 39 of the Rules
of Court provides:

“Sec. 6.  Execution of
motion or by independent action.  A
judgment may be executed on motion within five (5) 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 petitioner citing the case of Philippine National
Bank v. Bondoc (14 SCRA 770), maintains that the
ten-year prescriptive period provided for in Article 1144(3) commences to run
only from the finality of the revived judgment. 
In this case, the Court stated:

“Appellee’s theory relates the period of prescription to the
date the original judgment became final. 
Such a stand is
inconsistent with the accepted view that a judgment reviving a previous one is
a new and different judgment.  The
inconsistency becomes clearer when we consider that the causes of action in the
three cases are different.  In the original case, the action was premised
on the unpaid promissory note signed by Joaquin Bondoc in favor of the
Philippine National Bank; in the second case, the Philippine National Bank’s
cause of action was the judgment rendered in Civil Case No. 8040; and in the
present case, the basis is the judgment rendered in Civil Case No. 30663.   Parenthetically, even the amounts involved
are different.

“The  source of Section 6
aforecited is Section 447 of the Code of Civil Procedure which in turn was
derived from the Code of Civil Procedure of California.  The rule followed in California in this
regard is that a proceeding by separate ordinary action to revive a judgment is a new action rather than a
continuation of the old, and results in a new judgment constituting a new cause
of action, upon which a new period of limitations begins to run.  (Thomas v. Lally, 28 Cal. App. 308, 152 P. 53,
54′ Palace Hotel Co., v. Crist, 6 Cal. App. 2d. 690, 45 P. 2d 415).

“The judgment in Civil Case No. 30663, which provided the
cause of action in the case at bar, was rendered on February 20, 1957 and became final in the same year.  Pursuant to Article 1144(3) of the New Civil Code the action upon such judgment must be brought within ten years
from 1957 or until 1967.  The instant
case instituted in the court a quo on June 7, 1962 is well within the prescriptive period.” (at pp.
772-773).

In the later case of Philippine
National Bank v. Deloso (32 SCRA 266), however, we practically abandoned the ruling in Philippine
National Bank v. Bondoc, supra, when we said that:

“The other
question raised by
plaintiff-appellant was squarely ruled upon
by this Court in Gutierrez Hermanos v. De La Riva, 46 Phil.,
827 (1923), where it held that the ten-year
prescriptive period commences to run from
the date of finality of the judgment and not
from the expiration of five (5) years thereafter.  Three
reasons were there advanced, to wit:  (1)
Section 447 of the Code of Civil Procedure (which is similar to the last sentence of Section 6, Rule 39 of
the Revised Rules of Court) should be construed in relation to Section 43, No.
1, of the said Code (which is similar to Article 1144 of the Civil Code); and as thus construed, ‘the conclusion one
arrives at is that after the expiration of the five years within which execution can be issued upon a judgment,
the winning party can revive it only in the manner therein provided so long as
the period of ten years does not expire from the date of said judgment,
according to section 43, No. 1, of the
same Code.’ (2) The right of the winning party to enforce the judgment against the defeated party
‘begins to exist the moment the judgment is final; and this right, according to our
Code of Procedure, consists in having an execution of the judgment issued
during the first five years next following, and in commencing after that period
the proceeding provided in section 447 to revive it, and this latter
remedy can be pursued only before
the judgment prescribes, that is to say, during the five years next
following.  It is so much an action to
ask for an execution as it is to file a complaint
for reviving it, because, as we know,
by action is meant the legal
demand of the right or rights one may have.’ (3) If it is held that the winning
party has still ten (10) years
within which to revive the judgment after the expiration of five (5)
years, then the judgment would not prescribed until after fifteen (15) years,
which is against No. 1 of section 43 of the Code of Civil Procedure.  ‘[a]nd it cannot be said that such is the
letter, and much less, the intention of the law, for there is nothing in
section 447 of the said Code, making this new period different from the one
prescribed in said section 43, No. 1, or reconciling these two provisions,
there being no other way of reconciling them than to say that after the
expiration of the first five years next following the judgment, there remain to the victorious party only another five years
to review it.’ The doctrine in Gutierrez Hermanos has tacitly, yet
consistently, been adhered to by this Court (Cf. Asociacion Cooperativa de
Credito Agricola de Miagao v. Monteclaro, et al., 74 Phil., 281 [1943]; Philippine
National Bank v. Silo, G.R. No. L-3498, March 19, 1951; Ansaldo v. Fidelity and
Surety Co., G.R. No. L–2378,
April 27, 1951; Carrascozo v. Fuentebella,
G.R. No. L-5888, April 22, 1953;
Miciano v. Watiwat, et al., G.R. No.
L-8769, November 21, 1957; Lazaro, et al. v. Gomez, et al., G.R.
Nos. L-12664-65, September 30, 1960; Potenciano v. Gruenberg, et al.,
G.R. No. L-16956, February 27, 1962; Philippine
National Bank v. Monroy, G. R. No. L-19374, June 30, 1964; x x x; so that it is now settled that the ten-year period within which
an action for revival of a judgment should be brought, commences to run from
the date of finality of the judgment, and not from the expiration of the
five-year period within which the judgment may be enforced by mere motion (Art.
1152, Civil Code).  (at pp. 270-272;
Underlining supplied).

The petitioner’s argument that the case of Philippine National
Bank v. Deloso, supra, is not applicable to the
instant case deserves scant consideration.  From the context of both decisions in the
cases of Philippine National Bank v. Bondoc
and Philippine National Bank v. Deloso, it
is clearly seen that the same issue was raised.  This is whether the ten-year prescriptive period to file an action to enforce a judgment
pursuant to Article 1144(3) of the New Civil Code commences
to run from the finality of the original judgment or from the revived
judgment.  Under the later case of Philippine
National Bank v. Deloso, the 10-year prescriptive
period must commence from the finality of the original judgment.

The decision in Civil Case No. 59506 became final and executory
on April 13, 1967.  The judgment was not
enforced.  The petitioner instituted
Civil Case No. 93268 within the prescriptive period to revive the judgment in
Civil Case No. 59506.  The revived
judgment was rendered on May 24, 1974. 
This judgment became final and executory sometime in 1974.  Again, this was not enforced.  On September 1, 1982, the petitioner filed a
claim in Special Proceedings No. Q-32291 before the then Court of
First Instance of Rizal.  What is sought
is a second revival of the judgment that had become final in 1967.  This can no longer be done due to the lapse
of the allowable period.

The decision in Philippine National Bank v.
Deloso, supra, is the later and better interpretation of the law.  We
apply it to the instant case.  We find
that the right of the petitioner to enforce the judgment against Gil Puyat, an
accommodation party and a defendant in Civil Case Nos. 59506 and 93268, filed
on September 1, 1982 had already prescribed considering that more than ten (10)
years had already elapsed from the finality of the original judgment on April
13, 1967.

The failure of the private respondents to raise prescription in
their “Comment to Claim” does not imply the waiver of such
defense.  In the instant case, there is
no new issue of fact that arises in connection with the question of
prescription.  All the pertinent dates showing that the petitioner’s enforcement of
the judgment under Civil Case No. 93268 has already prescribed can be
found in the petitioner’s allegations in the ”claim” as well as its
evidence filed in Special Proceedings No. Q-32291.  This removes the case from the general rule
that prescription if not impleaded in the
answer is deemed waived (Ferrer v. Ericta, 84 SCRA 706; and Garcia v. Mathis,
100 SCRA 250).

Considering these
findings, we find no need to discuss the other issues raised by the petitioner.

WHEREFORE, the
instant petition is hereby DISMISSED. 
The questioned decision of the then Intermediate Appellate Court, now
the Court of Appeals, is AFFIRMED.  Costs
against the petitioner.

SO ORDERED.

Fernan, (Chairman), Paras, Padilla, and Cortes, JJ., concur.

Bidin, J., no part.