Philippine Supreme Court Jurisprudence > Year 1965 > July 1965 Decisions > G.R. No. L-16631 July 20, 1965 - DEV. BANK OF THE PHIL. v. MANUEL S. OZARRAGA:

This action is one to foreclose a mortgage, filed in the Court of First Instance of Agusan by the Development Bank of the Philippines (as successor of the Agricultural and Industrial Bank) against the administrator of the Estate of Leon Cuñat, mortgage debtor. Upon defendant’s motion that court held the action to have prescribed, and so dismissed the complaint. Plaintiff has appealed on the sole question of prescription.

The indebtedness, in the sum of P800.00 was incurred on August 7, 1941. It was payable in five yearly installments, the last of which would be due on August 7, 1946. As security Cuñat executed a mortgage on a parcel of land owned by him. He died in 1942 and neither he nor his heirs after him paid anything on the loan.

The creditor, plaintiff-appellant Bank, filed this foreclosure suit on July 13, 1959. The cause of action should have accrued on the date the last installment became due — August 7, 1946 — but was suspended by the debt moratorium (Executive Order No. 32, issued March 10, 1945. The moratorium was lifted by Republic Act No. 342 on July 26, 1948, except for those who had filed war damage claims; and since it is neither pretended nor shown that Leon Cuñat was a war damage claimant the period of prescription (10 years) in regard to his indebtedness to plaintiff-appellant must be counted from that date.

This action having been commenced beyond that period, the question is whether there had been an interruption thereof in the interim, as plaintiff-appellant contends. Several circumstances are relied upon in support of this contention.

(1) It is alleged that after Leon Cuñat’s death his heirs, namely, his widow and children, by their acts induced appellant to delay the enforcement of its claim. Such acts are denied by them. No finding thereon, one way or the other, has been made by the lower court in its order dismissing the complaint; and this is a question of fact which, we must assume, appellant has elected to forego by appealing directly to this Court.

(2) On July 18, 1958 appellant filed a petition for the appointment of an administrator of Cuñat’s estate. It is now urged that prescription was interrupted then — eight days before the ten-year period expired. The filing of the petition did not produce such result. Neither in express terms nor by implication does the statute of limitations support appellant’s argument. A petition to open an administration proceeding over the estate of a deceased debtor, even if brought by the creditor, does not discharge the function of an action to enforce the debt.

(3) Reference is made by appellant to demand letters sent to Leon Cuñat on different dates in 1950, 1952 and 1957, before appellant learned of his death, as well as to letters sent to his widow and children thereafter. Such extra-judicial demands, however, did not have the effect of interrupting prescription, which started under the law in force (Act No. 190) prior to the new Civil Code. According to Article 1116 of this Code prescription already running before it became effective shall be governed by laws previously in force; and under Section 50 of Act No. 190 a written extra-judicial demand for payment was not among the grounds which would renew a right of action, although now it does have that effect according to Article 1155 of the New Code. Appellant’s reliance on this Article is misplaced and the lower court committed no error in holding it to be inapplicable, and consequently in dismissing the complaint.

The order appealed from is affirmed, with costs.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Paredes, Dizon, Regala, Bengzon, J.P. and Zaldivar, JJ., concur.