DEVELOPMENT BANK OF THE PHILIPPINES (DBP) VS. THE HONORABLE MIDPAINTAO L.
ADIL, Judge of the Second Branch of the Court of First Instance of Iloilo and SPOUSES
PATRICIO CONFESOR and JOVITA VILLAFUERTE
G.R No. L-48889, May 11, 1989
GANCAYCO, J.:
NATURE OF ACTION
A petition for review on certiorari is the validity of promissory note which was executed
in consideration of a previous promissory note the enforcement of which had been
barred by prescription.
FACTS
Spouses Patricio Confesor and Jovita Villafuerte has obtained an agricultural loan from
the Agricultural Industrial Bank (AIB), now known as Development Bank of the
Philippines (DBP), in the sum of Php 2,000 evidenced by a promissory note payable in
ten (10) equal yearly amortizations on February 10, 1940.
The obligation remained outstanding and unpaid even after the lapse of 10-year period.
On April 11, 1961, Confesor executed another promissory note wherein he expressly
acknowledged the said loan and promised to pay on or before June 15, 1961.
The spouses were not able to pay the loan within the date specified in the second
promissory note.
ISSUE
Whether or not the right of action has prescribed.
RULING
NO. The Court held that although Article 1112 of the Civil Code provides:
“Persons with capacity to alienate property may renounce prescription already obtained,
but not the right to prescribe in the future.
Prescription is deemed to have been tacitly renounced when the renunciation results
from acts which imply the abandonment of the right acquired.”
There is no doubt that prescription has set in as to the first promissory note of February
10, 1940. However, when respondent Confesor executed the second promissory note on
April 11, 1961 whereby he promised to pay the amount covered by the previous
promissory note on or before June 15, 1961, and upon failure to do so, agreed to the
foreclosure of the mortgage, said respondent thereby effectively and expressly
renounced and waived his right to the prescription of the action covering the first
promissory note.
This Court had ruled in a similar case that –
... when a debt is already barred by prescription, it cannot be enforced by the
creditor. But a new contract recognizing and assuming the prescribed debt would
be valid and enforceable ...
Digest by: Nilfpe Criss Salcedo
Thus, it has been held —
Where, therefore, a party acknowledges the correctness of a debt and promises
to pay it after the same has prescribed and with full knowledge of the
prescription he thereby waives the benefit of prescription.
This is not a mere case of acknowledgment of a debt that has prescribed but a new
promise to pay the debt. The consideration of the new promissory note is the pre-
existing obligation under the first promissory note. The statutory limitation bars the
remedy but does not discharge the debt.
A new express promise to pay a debt barred ... will take the case from the
operation of the statute of limitations as this proceeds upon the ground that as a
statutory limitation merely bars the remedy and does not discharge the debt,
there is something more than a mere moral obligation to support a promise, to
wit a – pre-existing debt which is a sufficient consideration for the new the new
promise; upon this sufficient consideration constitutes, in fact, a new cause of
action.
... It is this new promise, either made in express terms or deduced from an
acknowledgement as a legal implication, which is to be regarded as reanimating
the old promise, or as imparting vitality to the remedy (which by lapse of time
had become extinct) and thus enabling the creditor to recover upon his original
contract.
Digest by: Nilfpe Criss Salcedo
