Title
Luzon Surety Co., Inc. vs. Intermediate Appellate Court
Case
G.R. No. 72645
Decision Date
Jun 30, 1987
A final 1967 judgment for P20,000 was revived in 1974 but unenforced. Claim filed in 1982 against Gil Puyat’s estate was barred by prescription, as the 10-year period began in 1967, not 1974. SC affirmed dismissal.
prescriptive period
original judgment
revived judgment
A

Case Summary (G.R. No. 72645)

Factual Background

In Civil Case No. 59506 of the Court of First Instance of Manila, judgment was rendered against the defendants, including Gil Puyat, for P20,000.00 as principal with interest at twelve percent computed and compounded quarterly from June 25, 1958, and for P3,608.00 representing premiums and stamps. The judgment became final on April 13, 1967. No enforcement followed.

Within the allowable period, a revival action was filed as Civil Case No. 93268 to revive the judgment in Civil Case No. 59506. On May 24, 1974, judgment was rendered in Civil Case No. 93268, ordering the defendants, jointly and severally, to pay the plaintiff P20,000.00 with the same interest terms from June 25, 1958 until fully paid, plus P3,608.00 with interest at the legal rate from January 11, 1965 until full payment, and costs. The crossclaim ordering reimbursement among the defendants was likewise adjudged. Despite this revival judgment, enforcement was again not pursued.

On March 28, 1981, Gil Puyat died. On September 1, 1982, a claim against his estate was filed in Sp. Proc. No. Q-32291 before the Court of First Instance of Rizal, Branch XVIII, in Quezon City. The claim sought P178,507.76, inclusive of interests, unpaid premiums and stamps, and attorney’s fees and costs as of June 25, 1982.

The administrators opposed the claim on the ground that it was unenforceable and barred by laches, asserting that the claimant took no steps to secure a writ of execution during the lifetime of Gil Puyat, either to enforce the original judgment in Civil Case No. 59506 or the revived judgment in Civil Case No. 93268. On November 8, 1983, the Regional Trial Court of Quezon City, Branch LXXXVIII, promulgated judgment dismissing the case.

Appellate Proceedings and Core Dispute

The petitioner appealed. The appellate court affirmed and dismissed the appeal, adopting the trial court’s reasoning that the creditor’s right had prescribed. The appellate court held that while a judgment may be executed on motion within five years from the date it becomes final and executory, after lapse of that time and before it is barred by the statute of limitations, the judgment may be enforced by action. It further held that the prescriptive period for enforcement of judgments is ten years. The decisive point was the computation: the appellate court ruled that the ten-year period should not be counted from the finality of the revived judgment in Civil Case No. 93268, but from the finality of the original judgment in Civil Case No. 59506, which had become final on April 13, 1967. It reasoned that the revived judgment did not create an extended period beyond what the rules and the Civil Code allow; rather, it suspended only the running of the second five-year period contemplated in Sec. 6, Rule 39. Thus, after the revived judgment became final, the creditor had only the remaining portion of the allowable five-year period to enforce by motion, not a fresh ten-year window. Applying that approach, the appellate court viewed the claim filed on September 1, 1982 as untimely, given that more than ten years had elapsed from the finality of the original judgment and more than five years from the finality of the revived judgment.

In support, the appellate court cited Talbo, et al. v. Laprodes, et al., which had cited Philippine National Bank v. Deloso and had stated the controlling principle that the prescription of an action is counted from the finality of the judgment itself, and not from the expiration of the five-year period within which execution may be had by mere motion. The appellate court therefore rejected the petitioner’s contrary computation.

The Parties’ Contentions

The petitioner maintained that the ten-year prescriptive period under Art. 1144(3) should be counted from the finality of the revived judgment, not from the finality of the original judgment. It relied on Philippine National Bank v. Bondoc, which had characterized a judgment that revives a prior one as a new and different judgment, and thus treated the revived judgment as the proper starting point for prescription.

The petitioner insisted that its action was filed within ten years from the finality of the revived judgment rendered on May 24, 1974 and that the September 1, 1982 filing fell within that period. In substance, the petitioner argued that enforcement through revival should restart the prescriptive clock.

On the other hand, the respondents and the courts below relied on the later, controlling interpretation of the rules and the Civil Code in Philippine National Bank v. Deloso, and on the earlier doctrine in Gutierrez Hermanos v. De La Riva, both of which held that the ten-year period runs from the finality of the original judgment. The appellate court further concluded that the petitioner’s September 1, 1982 filing sought what was, in effect, a second revival of a judgment that had already exhausted the allowable periods under Sec. 6, Rule 39 and Art. 1144(3).

Legal Basis and Reasoning

The controversy required reconciliation of Art. 1144(3) and Sec. 6, Rule 39. Under Art. 1144(3), actions “upon judgment” must be brought within ten years from the time the right of action accrues. Under Sec. 6, Rule 39, a judgment may be executed on motion within five years from entry or from finality; after such lapse and before the judgment is barred by the statute of limitations, the judgment may be enforced by action.

The petitioner urged the earlier reasoning in Philippine National Bank v. Bondoc, which adopted a view that a revival judgment is a new and different judgment and thus starts a new prescriptive period. That view traced the rule to Section 447 of the Code of Civil Procedure and to California practice in which revival by separate ordinary action was treated as a new action and resulted in a new judgment, with a new limitation period.

The Court, however, treated Philippine National Bank v. Deloso as the later and better interpretation. In Deloso, the Court acknowledged and effectively abandoned Bondoc, invoking the earlier rule in Gutierrez Hermanos v. De La Riva. The Court in Deloso had held that the ten-year prescriptive period for revival or enforcement commences from the date of finality of the original judgment, not from the expiration of the five-year period during which execution could be sought by mere motion. It justified this with: (one) a harmonized reading of the Civil Code and the procedural provision, such that revival must be pursued only before the original judgment prescribes; (two) the recognition that the right to enforce begins when the judgment becomes final and the remedial structure allows execution within five years and then revival only before the ten-year period from finality runs; and (three) the policy result that allowing another full ten years after the five-year motion period would effectively extend prescription to fifteen years, a result deemed inconsistent with the controlling statutory scheme.

Applying Deloso to the case at hand, the Court followed the later and controlling doctrine. The original judgment in Civil Case No. 59506 became final and executory on April 13, 1967. The creditor instituted Civil Case No. 93268 within the prescriptive period to revive. The revived judgment was rendered on May 24, 1974, and it became final and executory sometime in 1974. Yet the creditor again failed to enforce.

The crucial legal point was the September 1, 1982 filing in the estate proceeding. The Court treated what was sought as, in effect, a second revival of a judgment that had already become subject to prescription. The Court reasoned that the right of the creditor to enforce the judgment against Gil Puyat—who was described as an accommodation party and as a defendant in both Civil Case Nos. 59506 and 93268—had already prescribed by September 1, 1982, because more than ten (10) years had elapsed from the finality of the original judgment on April 13, 1967.

The Court also addressed the petitioner’s attempt to avoid the prescription defense by arguing that the administrators failed to raise prescription in their “Comment to Claim.” The Court held that this omission did not amount to waiver under the circumstances. It stated that the case presented no new factual i

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