G.R. No. 174433 - Philippine National Bank vs. Spouses Manalo

The Overseas Bank of Manila (petitioner-appellant) filed Civil Case No. 105037 against Teodosio Valenton and Andres A. Juan (respondents-appellees) for recovery of ₱150,000 plus interest and attorney’s fees.
The Court of First Instance of Manila, by orders of January 4 and February 9, 1977, dismissed the complaint on the ground of prescription.

On February 16, 1966, the respondents obtained from the bank a credit accommodation of ₱150,000 secured by a chattel mortgage.
The bank alleged written extrajudicial demands on February 9, March 1 and 27, 1968; November 13 and December 8, 1975; and February 7 and August 27, 1976, all of which were refused on the ground that the obligation had allegedly been assumed by a third party without the bank’s consent.

The cause of action accrued on February 16, 1966; the complaint was filed on October 22, 1976, more than ten years later.
The court held that each extrajudicial demand interrupted prescription only for the period specified in the demand (none specified → one day each).
Six valid demands tolled prescription for six days, extending the prescriptive period to February 21, 1976; the seventh demand fell after expiration.
Consequently, the action filed on October 22, 1976 was barred by the ten-year prescription.

What is the legal effect of a written extrajudicial demand on the ten-year prescriptive period for an action on a written contract?
Whether the bank’s action filed on October 22, 1976 was already barred by prescription despite the demand letters.