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. 10, B A 29, 1964 337

Rep blic . A cache

No. L-15547. Febr ar 29, 1964.

REPUBLIC OF THE PHILIPPINES, plain iff-appellee, . JOSEPH

ARCACHE, ET AL., defendan -appellan .

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338 C A A D
Rep blic . A cache

Ta ation; Go ernment action for reco er of ta es; Bond for ta

clearance not obtained b coercion. The Bureau of Internal Re enue as
perfectl ithin its right in demanding the ling of a bond as condition for
the issuance of ta clearance, and in a subsequent action on said bond it is
no defense that such requirement amounted to coercion.
Same; Same; Forfeiture of ta bond; Defense b ta pa er of
prescription; Estoppel In a suit brought b the go ernment for the
forfeiture of the bond put up for unpaid ta es, the ta pa er is barred from
in oking the defense of prescription b the follo ing circumstances: (1) the
dela as due to his repeated requests for rein estigation and for e tensions
of time to pa ; (2) he admitted in riting his ta obligation, made repeated
promises to pa the same, and actuall made t o partial pa ments; (3) the
action on the bond is on a ritten contractual obligation for hich the
prescripti e period is 10 ears and said period had not et elapsed hen the
action as led; and (4) the gi ing of the bond amounts to a rene al of the
ta obligation and a ai er of the defense of prescription.

APPEAL from a j dgmen of he Co r of Fir In ance of Manila.

Tan, J.

The fac are a ed in he opinion of he Co r .

Solici o Gene al for plain iff-appellee.
O lando V. Vela co and Jo e K. Mang ia for defendan -
appellan .

DIZON, J.:

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On J l 7, 1958, he Rep blic of he Philippine led an ac ion

again Jo eph Arcache and he Globe A rance Compan , Inc. for
he forfei re of he re bond e ec ed b hem (Arcache, a
principal, and he Globe A rance Compan , Inc., a re ) o
ec re pa men of he m of P22,524.41 repre en ing Arcache'
income a for he ear 1946 and rcharge, pl 1% mon hl
in ere on he income a proper amo n ing o P18,289.71, from
J ne 21, 1954 o A g 31, 1956.
Arcache, af er admi ing ome of he a ermen made in he
complain and den ing o her , in erpo ed he defen e of
pre crip ion, and alleged f r her ha he a "compelled again hi
ill" o e ec e he re bond o gh o be forfei ed, beca e he
B rea of In ernal Re en e ref ed o i e him a a clearance
hich he needed o make a b ine rip abroad nle he e ec ed
aid bond

33

. 10, B A 29, 1964 339

Rep blic . A cache

o ec re he pa men of hi alleged a obliga ion.

The epara e an er led b he Globe A rance Compan , Inc.
like i e admi ed ome of he a ermen made in he complain and
denied he o her , and f r her alleged ha i adop ed he defen e of
fac and la rai ed b i co-defendan ; ha he re bond o gh
o be forfei ed became n ll and oid a again i af er he lap e of
one ear from he da e of i e ec ion, for lack of con idera ion,
Arcache no ha ing paid he req ired premi m hereon for he
econd ear; and ha , a an ra e, i co ld no pa i obliga ion
nder he afore aid re bond beca e of he inj nc ion i ed
again i b he Co r of Fir In ance of Manila in Ci il Ca e No.
30844. B a of cro -claim, i o gh j dgmen again i co-
defendan for he en ire amo n ha i migh be en enced o pa o
he plain iff b rea on of he re bond here ofore men ioned, pl
he m of P863,43 a npaid premi m on aid bond.
Arcache a declared in defa l on he cro -claim, and af er
recei ing cro -plain iff e idence hereon, he lo er co r rendered
j dgmen a follo :

"WHEREFORE, the Court hereb renders judgment on the cross-claim led

b defendant Globe Assurance Compan , Inc. against its co-defendant,
Joseph Arcache, sentencing the cross-defendant to pa the cross-claimant
hate er amount ma be adjudged against it in fa or of the plaintiff, ith
interest thereon at the legal rate from the date of pa ment b crossclaimant
until full paid b the cross-defendant; to pa the accrued premiums on the
ordinar bond for pa ment of ta es at the rate of P450.49 per annum or
fraction thereof, also ith interest at the rate of 12% per annum from the

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time the same became due and pa able; and to pa an amount equi alent to
15% of the total sum due to the Globe Assurance Compan , Inc., b a of
attorne 's fees. With costs against the crossdefendant."

Af er rial on he i e ari ing from he main ca e, he lo er co r

al o rendered j dgmen on April 27, 1959, he di po i i e par of
hich i a follo :

"WHEREFORE, the Court hereb renders judgment in fa or of the plaintiff

and against the defendants, ordering said defendants to pa plaintiff, jointl
and se erall , thru the Commissioner of Internal Re enue, the sum of
P22,524.41, plus interest on the income ta proper of P18,289.81 at the rate
of 12%

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340 C A A D
Rep blic . A cache

per annum from September 1, 1956 until the same is full paid, and to pa
the costs."

From he j dgmen la men ioned, Arcache appealed claiming ha

(a) he lo er co r erred in no aining hi defen e of pre crip ion
and (b) in holding ha , b e ec ing he re bond o ec re he
pa men of he income a allegedl d e from him, he hereb
ackno ledged hi a liabili .
The e idence di clo e ha on March 1, 1947, appellan led hi
income a re rn for he ear 1946, hich ho ed a lo in he
amo n of P2,272.23 (E h. B). S b eq en in e iga ion re ealed,
ho e er, ha in 1946 he had an ne plained increa e in ne or h,
hi promp ing he B rea of In ernal Re en e o e he "ne or h
me hod" in de ermining hi r e income for aid ear. A a re l , he
corre ponding a e men a i ed again him in 1948. Upon hi
pe i ion, e eral re-in e iga ion of hi income a liabili ere
hereaf er made, n il nall in 1952 an a e men for P63,536.40
a i ed again him a income a for 1946, (E h. C). No
a i ed i h he re l Arcache a ked for a f r her re-e amina ion
of hi ca e i h a ie o ded c ing he m of P60,000
repre en ing ad ance for good ill, priori pri ilege e c. from hi
1946 ne income for ha ear amo n ing o P137,944.00. The
B rea of In ernal Re en e obliged and made ano her
rein e iga ion, hi re l ing in he nding ha appellan ' income
in 1946, repre en ed b hi increa e in ne or h, amo n ed o
P77,944.00. Accordingl , on Sep ember 16, 1953, he B rea
a e ed again him he amo n of P19,080.96 and P9,540.48 a
income a , and 50% rcharge, re pec i el (E h. D-1).
On Oc ober 29, 1953, appellan ro e a le er o he Collec or of
In ernal Re en e hanking him and hi aff "for ha ing re-e amined
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he a e men and ha ing fo nd ha ha he reall o e he

in ernal re en e of ce i P19,080.96 in ead of pre io
a e men ," adding ha a alread manife ed in pre io le er ,
he a " illing o pa he amo n ip la ed abo e min of co r e
he P2.000 I alread paid o r of ce on acco n of aid
a e men ." He; ho e er, a ked for he elimina ion of he 50%
rcharge

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. 10, B A 29, 1964 341

Rep blic . A cache

amo n ing o P9,540.48 on he gro nd ha hi ref al o pa he a

a d e o a mere mi nder anding and no o an in en ion o
defra d. ra d. Again, hi req e a gran ed, and on December 9,
1953, ano her demand a made pon him for he pa men onl of
he m of P19,080.96 repre en ing he a proper of hi income a
liabili for 1946, pl " he delinq enc penal ie inciden o la e
pa men " and he addi ional m of P133.50 a ad er i ing e pen e
inc rred b he B rea in he p blica ion of he no ice of ale of hi
real proper ie (E h. F-1).
On December 28 of he ame ear, appellan ro e ano her le er
o he Dep Collec or of In ernal Re en e reminding him of he
pre io pa men of P2,000 on acco n of hi 1946 income a
liabili of P19,080.96, and req e ing for an e en ion of one-
h ndred en da i hin hich o pa he balance of P17,080.96
pl he 5% rcharge and he mon hl in ere of 1% (E h. F).
Al ho gh hi req e a al o gran ed, appellan failed o pa
i hin he e en ion gran ed. In ead, on J ne 17, 1954, he remi ed
o he B rea of In ernal Re en e a P1,000.00-check a par ial
pa men of hi a liabili "in ign of good fai h", and req e ed
ano her e en ion o pa he balance o gi e him ime o ell an of
hi proper ie in order o "liq ida e once and for all m obliga ion o
he In ernal Re en e" (E h. H).
On A g 23, 1955, appellan , a principal, and he Globe
A rance Compan , Inc., a re , e ec ed he re bond
E hibi A o ec re pa men of he former' a liabili hen
amo n ing o P22,524.41. The bo nd hem el e , join l and
e erall , o pa he afore aid amo n and " o co er f ll pa men of
he obliga ion of Jo eph Arcache o he B rea of In ernal Re en e
for income a , rcharge and in ere comp ed nder he in en or
me hod, o be paid on or before A g 31, 1956", and o pa o he
Rep blic of he Philippine ha e er addi ional penal ie ma
accr e on acco n of heir fail re o pa each in allmen a i fall
d e.
While appellan con end ha he abo e-men ioned bond a
ec red from him hro gh coercion impo ing i e ec ion a a
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condi ion for he i ance o him of a a clearance req ired in

connec ion i h a rip abroad he in ended

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342 C A A D
Rep blic . A cache

o make, he B rea of In ernal Re en e con end ha he bond a

req ired o ge a rance of pa men in ie of appellan ' repea ed
fail re o compl i h hi promi e o e le hi a liabili . The
i e h ari ing i , ho e er, imma erial beca e e en a ming
ha he bond a led for he rea on alleged b pe i ioner, i eem
ob io ha he B rea of In ernal Re en e a perfec l i hin i
righ in demanding he ling iling of he bond a a condi ion for he
i ance of he a clearance for appellan .
S b eq en l , ha i on A g 31, 1956, appellan propo ed o
a ign o he B rea of In ernal Re en e hi righ , i le and in ere
in he amo n of P20,713.00 allegedl d e o him from he
Depar men of Labor a ren al in arrear , in par ial a i fac ion of
hi a obliga ion, b he propo i ion a rejec ed, he B rea
gran ing pe i ioner in ead ano her e en ion pro ided he led
i hin en da ano her re bond i h he condi ion peci ed in
i le er of Sep ember 4, 1956 (E h. M). Appellan , af er ob aining
o e en ion of ime, failed o le he bond. Con eq en l , a nal
demand on him and hi re for he e lemen of heir obliga ion
nder he bond of A g 23, 1955 (E hibi O-1 and P) a made,
and hen he bo h failed o do o, he pre en ca e a led.
In he ligh of he ndi p ed fac a ed here ofore, e are of
he opinion ha appellan i no barred from rom in oking he
defen e of pre crip ion.
In he r place, i appear ob io ha he dela in he
collec ion of hi 1946 a liabili a d e o hi o n repea ed
req e ?"or rein e iga ion and imilarl repea ed req e for
e en ion of ime o pa . Thi ca e, herefore, fall i hin he
p r ie of o r r ling in Collec or of In ernal Re en e . S oc
Con olida ed Mining Compan e al. (G.R. No. L-11527, No ember
25, 1958) o hi effec :

"While e ma argue ith the Court of Ta Appeals that a mere request for
re-e amination or rein estigation ma not ha e the effect of suspending the
running of the period of limitation for in such a case there is need of a.
ritten agreement to e tend the period bet een the Collector and the
ta pa ers, there are cases ho e er here a ta pa er ma be pre ented from
setting up the defense of prescription e en if he has not pre iousl ai ed it
in riting as hen b his repeated requests or positi e acts the Go ernment
has been, for good reasons, persuaded to postpone collection to make him
feel that

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. 10, B A 29, 1964 343

Rep blic . A cache

the demand as not unreasonable or that no harassment or injustice is meant

b the Go ernment. And hen such situation comes to pass there are
authorities that hold, based on eight reasons, that such an attitude or
beha ior should not be countenanced if onl to protect the interest of the
Go ernment."
"This case has no precedent in this jurisdiction for it is the rst time that
such has arisen, but there are se eral precedents that ma be in oked in
American jurisprudence. As Mr. Justice Cardo o has said: "The applicable
principle is fundamental and unquestioned. 'He ho pre ents a thing from
rom being done ma not a ail himself of the non-performance hich he has
himself occasioned, for the la sa s to him in effect 'this is our o n act,
and therefore ou are damni ed.' (R. H. Stearns Co. . U.S., 78 L. ed., 647).
Or, as as aptl said: "The ta could ha e been collected, but the
go ernment ithheld action at the speci c request of the plaintiff. The
plaintiff is no estopped and should not be permitted to raise the defense of
the Statute of Limitations." (Ne port Co. . U.S., [DC-WIS], 34 F. Supp.
588)".

In he econd place, appellan admi ed in ri ing hi a obliga ion

and promi ed o pa he ame, no once b e eral ime e en af er
he da e hen according o him he go ernmen ' righ o collec
had alread pre cribed. In fac , he no onl made ch repea ed
promi e o e le hi acco n b he ac all made o par ial
pa men , he r of P2,000 and he la P1,000.
In he hird place, i i o be no ed ha he pre en ac ion a
led for he forfei re of he bond E hibi A in a i fac ion of he a
obliga ion of appellan . Th , he ac ion i for he enforcemen of a
ri en con rac al obliga ion, for hich he pre crip i e period i
en ear hich in hi ca e had no e elap ed hen he ac ion
a led. I i alread e led in hi connec ion ha he gi ing of a
bond a a condi ion of an e en ion of ime for he pa men of
income a , e en af er he collec ion of he a a ch a barred b
he a e of limi a ion , doe no precl de reco er on he bond
(John Bar Compan . U.S., 279 U.S. P. 370; [73 L. Ed. 743]; U.S.
. E. Hog hire and Co. [1930; D.C.] 37 F. [2d] 720; U.S. . R h,
62 [2d] 385 [CCA 5 h, 1933]).
Finall , o he ame effec i o r r ling in Sambrano . Co r of
Ta Appeal , e al., G.R. No. L-8652, March 30, 1957, a follo :

"B irtue of this instrument, petitioner in fact ackno l

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344 C A A D
Gal e . T a on

edged the e istence of the ta liabilities , and assumed the obligation to

settle the same. Although the percentage ta es for the ears 1939-1941 and
1945 ma ha e been e tinguished b prescription on account of the mandate
of Sections 331 and 332, et in the case at bar, petitioner's obligation to pa
the percentage ta es for the ears 1939-1941 and 1945, assessed on Januar
6, 1951, and re-assessed on April 28, 1951, as ell as other ta de ciencies,
as ackno ledged b means of the chattel mortgage of Ma 3, 1951, an act
hich amounts to a rene al (reno acion) of the obligation or a ai er of
the bene t granted b la to the petitioner ho is estopped from raising the
question of prescription after ha ing ai ed such defense b the e ecution
of said mortgage."

WHEREFORE, nding no error in he deci ion appealed from, he

ame i hereb af rmed, i h co .

Beng on, C.J., Padilla, Ba i a Angelo, Lab ado , Re e ,

J.B.L., Ba e a, Pa ede , Regala and Makalin al, JJ., conc r.
Conce cion, J., ook no par .

Deci ion af med.

No e . A i a ion ma ari e here he a pa er ma be in

e oppel o claim pre crip ion a hen a a pa er a k for a
rein e iga ion of he a a e men i ed o him and ch
rein e iga ion i made. Thi r le i rei era ed in Re blic .
Acebedo, L-20477, March 29, 1968, 22 SCRA 1356, ci ing Re blic
. Lo e , L-18007, March 30, 1963; Commi ione . Si on, L-
13739, April 30, 1963 and Collec o . S oc Con olida ed Co., L-
11527, No . 25, 1958. The la er ca e i al o ci ed a he ba i for he
holding in hi ca e of Re blic . A cache, L-15547, Feb. 29, 1964,
an e.
On bond , ee anno a ion on "E ec ion Again Inj nc ion Bond
and Similar Bond Af er Hearing", 17 SCRA 404.

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C g 2021 Ce a B S , I c. A g e e ed.

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