Case Summary (G.R. No. 179652)
Petition and Initial Decision
Manuel T. Flores invoked the defense of prescription, asserting that the debt had already prescribed during the period from 1941 to 1954. The Municipal Court initially dismissed the complaint on the ground that the prescriptive period had run. However, upon appeal, the Court of First Instance reversed this decision, holding that the moratorium laws enacted during the intervening period had effectively suspended the running of prescription. It deduced that since these laws suspended the prescriptive period for three years and eight months, the ten-year prescriptive period for collection had not yet elapsed when Manila Motor Company filed its claim in 1954. The case was remanded for trial on the merits.
Appellant’s Arguments on Unconstitutionality of Moratorium Laws
Manuel T. Flores challenged the Court of First Instance’s ruling mainly on the ground that the moratorium laws were unconstitutional, citing the Supreme Court decision in Rutter vs. Esteban (49 Off. Gaz. 1807), which declared such laws invalid. Flores relied on established jurisprudence that an unconstitutional statute is considered inoperative, confers no rights, and cannot serve as a legal basis for claims. On this premise, he argued that the moratorium laws could not suspend the prescriptive period.
Supreme Court’s Consideration on Appealability and Merits
Some members of the Supreme Court expressed doubt about whether the order of the lower court was appealable. Nonetheless, the Court chose not to rule on the appealability issue, instead deciding the case on the merits presented by the appellant regarding the effect of the moratorium laws.
Legal Precedent Affirming Suspension of Prescription by Moratorium Laws
The Supreme Court referred to the case Montilla vs. Pacific Commercial (98 Phil. 133), decided after Rutter vs. Esteban, which held that the moratorium laws did indeed suspend the running of the prescriptive period. It was noted that the petitioner had already submitted his brief before the Montilla decision was rendered. The Court emphasized that Rutter vs. Esteban could be interpreted to mean that the moratorium law might no longer be valid under then-prevailing circumstances but did not necessarily negate its suspensive effect during its operative period.
Doctrine on Effect of Unconstitutional Statutes
The Court further discussed the general legal principle that an unconstitutional statute is void and confers no rights or protections. However, it recognized equitable exceptions where courts have relaxed this doctrine, especially when the existence and enforcement of the statute prior to its invalidation had legal consequences that should not be ignored. The Court cited American jurisprudence illustrating that wholly disregarding the prior effects of such statutes may be unrealistic and unjust. Notably, the Court referenced the resolution in Araneta vs. Hill (93 Phil. 1002), which acknowledged that the operation of a statute prior to its declaration of unconstitutionality may carry operative facts impacting rights and l
...continue readingCase Syllabus (G.R. No. 179652)
Facts of the Case
- In May 1954, Manila Motor Company, Inc. (plaintiff and appellee) filed a complaint in the Municipal Court of Manila to recover the amount of P1,047.98 representing chattel mortgage installments due since September 1941.
- Manuel T. Flores (defendant and appellant) pleaded prescription, arguing that the claim was barred by prescription because more than ten years had elapsed from 1941 to 1954.
- The complaint was initially dismissed by the Municipal Court on the basis of prescription.
- On appeal, the Court of First Instance reversed the dismissal and held that the moratorium laws in effect had interrupted the running of the prescriptive period, deducting three years and eight months from the computation.
- The Court of First Instance ruled that the ten-year prescriptive period had not fully elapsed at the time of filing the complaint in May 1954 and ordered the case remanded for trial on the merits.
- The defendant appealed this decision, primarily contending that the moratorium laws could not suspend the period of limitations because they were unconstitutional as declared by the Supreme Court in Rutter vs. Esteban.
- Defendant argued jurisprudence that maintains that statutes declared unconstitutional are inoperative as if never passed, and no rights can be founded upon them.
- There was some judicial hesitation whether the Court of First Instance’s order was appealable, but the Supreme Court chose to resolve the issue on its merits instead.
Legal Issue: Effect of Moratorium Laws on Prescription Period
- The key legal question was whether the moratorium laws, despite having been declared unconstitutional in Rutter vs. Esteban, could nonetheless suspend the prescriptive period for the plaintiff's claims.
- The defendant appealed claiming that since the moratorium laws were unconstitutional, they should have no legal effect, including the suspension of prescription.
- The Court considered prior jurisprudence, especially Montilla vs. Pacific Commercial, which was rendered after Rutter vs. Esteban and held that the moratorium laws did suspend the period of prescription.
- The Court explored doctrinal exceptions to the general rule that unconstitutional laws confer no rights or protection.
Judicial Reasoning and Doctrine Applied
- The Court recognized the general principle that an unconst