G.R. No. L-13419 - Saladas vs. Franklin Baker Co.

Plaintiff Casiano Saladas was employed by defendant Franklin Baker Company from December 7, 1949, to June 2, 1952, when his employment was terminated.
During his employment, Saladas rendered overtime services for which he later claimed compensation.

Saladas filed a claim with the Wage Administration Service of the Department of Labor for overtime services rendered during his employment period.
On August 4, 1953, the Wage Administration Service determined that Saladas was entitled to overtime compensation amounting to ₱3,799.52.
A letter dated October 27, 1954, was sent by the Wage Administration demanding payment from the defendant, which was not met by the company.

Saladas initiated Civil Case No. Q-1299 on November 23, 1954, in the Court of First Instance of Rizal, Quezon City seeking recovery of the overtime compensation.
Before the hearing, on January 5, 1956, a motion for continuance was filed on the ground that the assigned prosecutor had left for the Visayas, rendering him unavailable; this motion was denied.
Subsequently, on January 9, 1956, the case was dismissed (presumably without prejudice).

On July 18, 1957, Saladas filed a new action for the recovery of the overtime compensation, thus instituting the present case.
In his amended answer, the defendant raised, among other special defenses, that the cause of action was barred by the statute of limitations.

At the time when the overtime services were rendered, the applicable limitation period for an oral contract was established at six years from the accrual of the cause of action (per Flores vs. San Pedro).
However, on June 22, 1957, Republic Act No. 1993 (amending Commonwealth Act No. 444, the Eight Hour Labor Law) took effect, reducing the limitations period to three years after the cause of action accrued.
A key element in RA No. 1993 was the proviso excluding from its operation “actions already commenced before the effective date,” implying that actions instituted thereafter would be governed by the new three-year period regardless of the time of accrual of the cause of action.

Plaintiff contended that the earlier filing of Civil Case No. Q-1299 and the written demand for payment should have the effect of suspending (or interrupting) the running of the prescriptive period.
Defendant argued that the earlier dismissal and related proceedings did not interrupt the prescription period and cited precedents (e.g., Peralta vs. Alipio) to support its position.
The case presented conflicting interpretations on whether the filing under the old regime or written demand constituted interruption under Article 1155 of the Civil Code of the Philippines.

Whether Saladas' claim for overtime compensation, covering the period from December 7, 1949, to June 2, 1952, is barred by the statute of limitations due to the effectivity of Republic Act No. 1993.

Whether the new limitation period of three years under RA No. 1993 should apply prospectively to a cause of action that originally accrued under a six-year limitation period.

Whether the acts of filing an earlier suit and a written demand for payment effectively interrupted or suspended the running of the prescriptive period as provided by Article 1155 of the Civil Code.

The constitutional implications of retroactively shortening the prescriptive period for pre-existing causes of action, particularly in light of due process and contractual rights.