Complaint for Sum of Money
G.R. NO. 140608, September 23, 2004
PERMANENT SAVINGS AND LOAN BANK, petitioner, vs. MARIANO VELARDE, respondent.
FACTS:
A sued B based on an alleged contract of loan amounting to 1MILLION. RTC and CA dismissed the case on the
ground that Rule 132, Sec. 21, Rules of Court was not followed. Hence, the case was elevated to the SC via petition
for review on certiorari under Rule 45 of the Rules Court. (See Full Text). The plaintiff won the case.
EVIDENCE of A: (Identified by a Witness)
1.
2.
3.
4.
Promissory Note
Loan Release Sheet
Loan Disclosure Statement
Letter of Demand
LESSONS:
1. ANSWER. The “answer” of the defendant was does not contain a specific denial. The answer
contains the phrase “only the signature appearing at the back of the promissory note, Annex “A” seems
to be that of herein defendant.”
According the SC, contrary to the ruling of both the RTC and the CA that the bank should have presented at
least a single witness qualified to testify on the existence and execution of the documents it relied upon to
prove the disputed loan obligations of Plaintiff anchored on (Rule 132, Sec. 21, Rules of Court) which
provides that: (B)efore any private writing may be received in evidence, its due execution and authenticity must
be proved either: (a) By anyone who saw the writing executed; (b) By evidence of the genuineness of the
handwriting of the maker; or (c) By a subscribing witness, as respondent’s Answer shows that he failed to
specifically deny under oath the genuineness and due execution of the promissory note and its concomitant
documents. Therefore, respondent is deemed to have admitted the loan documents and acknowledged his
obligation with petitioner; and with respondent’s implied admission, it was not necessary for petitioner to
present further evidence to establish the due execution and authenticity of the loan documents sued upon.
While Section 22, Rule 132 of the Rules of Court requires that private documents be proved of their due
execution and authenticity before they can be received in evidence, i.e., presentation and examination of
witnesses to testify on this fact; in the present case, there is no need for proof of execution and authenticity
with respect to the loan documents because of respondent’s implied admission thereof.30
Respondent claims that he did not receive the net proceeds in the amount of ₱988,333.00 as stated in the
Loan Release Sheet dated September 23, 1983.31 The document, however, bears respondent’s signature as
borrower.32 Res ipsa loquitur.33 The document speaks for itself. Respondent has already impliedly admitted
the genuineness and due execution of the loan documents. No further proof is necessary to show that he
undertook the obligation with petitioner. "A person cannot accept and reject the same instrument."34
2.
PRESCRIPTION + WRITTEN EXTRAJUDICIAL DEMAND (Interruption vs. Suspension) + DEMURRER
The Court also finds that petitioner’s claim is not barred by prescription. Petitioner’s action for collection of a sum
of money was based on a written contract and prescribes after ten years from the time its right of action
arose.35 The prescriptive period is interrupted when there is a written extrajudicial demand by the creditors. 36 The
interruption of the prescriptive period by written extrajudicial demand means that the said period would
commence anew from the receipt of the demand.37
Thus, in the case of The Overseas Bank of Manila vs. Geraldez,38 the Court categorically stated that the correct
meaning of interruption as distinguished from mere suspension or tolling of the prescriptive period is that said period
would commence anew from the receipt of the demand. In said case, the respondents Valenton and Juan, on February
16, 1966, obtained a credit accommodation from the Overseas Bank of Manila in the amount of ₱150,000.00. Written
extrajudicial demands dated February 9, March 1 and 27, 1968, November 13 and December 8, 1975 and February 7 and
August 27, 1976 were made upon the respondents but they refused to pay. When the bank filed a case for the recovery
of said amount, the trial court dismissed the same on the ground of prescription as the bank's cause of action accrued
on February 16, 1966 (the date of the manager's check for ₱150,000.00 issued by the plaintiff bank to the Republic Bank)
and the complaint was filed only on October 22, 1976. Reversing the ruling of the trial court, the Court ruled:
An action upon a written contract must be brought within ten years from the time the right of action accrues
(Art. 1144[1], Civil Code). "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" (Art. 1155, Ibid, applied in Gonzalo Puyat & Sons, Inc. vs. City of Manila, 117 Phil.
985, 993; Philippine National Bank vs. Fernandez, L-20086, July 10, 1967, 20 SCRA 645, 648; Harden vs.
Harden, L-22174, July 21, 1967, 20 SCRA 706, 711).
A written extrajudicial demand wipes out the period that has already elapsed and starts anew the
prescriptive period.
…
That same view as to the meaning of interruption was adopted in Florendo vs. Organo, 90 Phil. 483, 488,
where it ruled that the interruption of the ten-year prescriptive period through a judicial demand means that
"the full period of prescription commenced to run anew upon the cessation of the suspension". "When
prescription is interrupted by a judicial demand, the full time for the prescription must be reckoned from the
cessation of the interruption" (Spring vs. Barr, 120 So. 256 cited in 54 C.J.S. 293, note 27). That rule was
followed in Nator and Talon vs. CIR, 114 Phil. 661, Sagucio vs. Bulos, 115 Phil. 786 and Fulton Insurance Co. vs.
Manila Railroad Company, L-24263, November 18, 1967, 21 SCRA 974, 981.
…
Interruption of the prescriptive period as meaning renewal of the original term seems to be the basis of the
ruling in Ramos vs. Condez, L-22072, August 30, 1967, 20 SCRA 1146, 1151. In that case the cause of action
accrued on June 25, 1952. There was a written acknowledgment by the vendors on November 10, 1956 of the
validity of the deed of sale.
…
In National Marketing Corporation vs. Marquez, L-25553, January 31, 1969, 26 SCRA 722, it appears that Gabino
Marquez executed on June 24, 1950 a promissory note wherein he bound himself to pay to the Namarco ₱12,000 in
installments within the one-year period starting on June 24, 1951 and ending on June 25, 1952. After making partial
payments on July 7, 1951 and February 23, 1952, Marquez defaulted.
His total obligation, including interest, as of October 31, 1964, amounted to ₱19,990.91. Written demands for the
payment of the obligation were made upon Marquez and his surety on March 22, 1956, February 16, 1963, June 10,
September 18 and October 13, 1964. Marquez did not make any further payment.
The Namarco sued Marquez and his surety on December 16, 1964. They contended that the action had prescribed
because the ten-year period for suing on the note expired on June 25, 1962. That contention was not sustained. It was
held that the prescriptive period was interrupted by the written demands, copies of which were furnished the surety.
Respondent’s obligation under the promissory note became due and demandable on October 13, 1983. On July 27, 1988,
petitioner’s counsel made a written demand for petitioner to settle his obligation. From the time respondent’s
obligation became due and demandable on October 13, 1983, up to the time the demand was made, only 4 years, 9
months and 14 days had elapsed. The prescriptive period then commenced anew when respondent received the
demand letter on August 5, 1988.39 Thus, when petitioner sent another demand letter on February 22, 1994, 40 the action
still had not yet prescribed as only 5 years, 6 months and 17 days had lapsed. While the records do not show when
respondent received the second demand letter, nevertheless, it is still apparent that petitioner had the right to institute
the complaint on September 14, 1994, as it was filed before the lapse of the ten-year prescriptive period.
Lastly, if a demurrer to evidence is granted but on appeal the order of dismissal is reversed, the movant shall be deemed
to have waived the right to present evidence.41 The movant who presents a demurrer to the plaintiff’s evidence retains
the right to present their own evidence, if the trial court disagrees with them; if the trial court agrees with them, but on
appeal, the appellate court disagrees with both of them and reverses the dismissal order, the defendants lose the right
to present their own evidence. The appellate court shall, in addition, resolve the case and render judgment on the
merits, inasmuch as a demurrer aims to discourage prolonged litigations. 42 Thus, respondent may no longer offer proof
to establish that he has no liability under the loan documents sued upon by petitioner.
The promissory note signed and admitted by respondent provides for the loan amount of ₱1,000,000.00, to mature on
October 13, 1983, with interest at the rate of 25% per annum. The note also provides for a penalty charge of 24% per
annum of the amount due and unpaid, and 25% attorney’s fees. Hence, respondent should be held liable for these sums.
WHEREFORE, the petition is GRANTED. The Decisions of the Regional Trial Court of Manila (Branch 37) dated January
26, 1996, and the Court of Appeals dated October 27, 1999 are SET ASIDE. Respondent is ordered to pay One Million
Pesos (₱1,000,000.00) plus 25% interest and 24% penalty charge per annum beginning October 13, 1983 until fully paid,
and 25% of the amount due as attorney’s fees.