Villaroel vs. Estrada

Factual Background

On May 9, 1912, Alejandra F. Callao obtained from the spouses Mariano Estrada and Severina a loan of P1,000 payable at the end of seven years, evidenced by Exhibit A. Alejandra later died, leaving the defendant as her sole heir. The lenders, Mariano Estrada and Severina, also died, leaving the plaintiff as their sole heir. The original debt therefore devolved into the respective inheritances of the parties.

Instrumental Admission by Heir

On August 9, 1930, the defendant executed a document, identified as Exhibit B, by which he declared that he owed the plaintiff the sum of P1,000 with interest at twelve percent per annum. Exhibit B is the instrument on which the present suit for collection was founded.

Trial Court Proceedings

The action for recovery of P1,000 was instituted in the Juzgado de Primera Instancia de Laguna. That court entered judgment against the defendant, ordering payment to the plaintiff of P1,000 with legal interest at twelve percent per annum from August 9, 1930 until full satisfaction. The defendant appealed the judgment.

Procedural and Substantive Issue on Appeal

The parties are respectively the sole heirs of the original creditors and of the original debtor. It was conceded that the P1,000 referred to in Exhibit B is the same indebtedness originally contracted by the defendant’s mother in favor of the parents of the plaintiff. The primary legal question on appeal was whether the action founded on Exhibit B was maintainable notwithstanding that the action to enforce the original debt had prescribed before the present complaint was filed.

Parties' Contentions

The plaintiff relied upon Exhibit B as creating an obligation enforceable against the defendant. The defendant relied upon the fact that the original obligation had become unenforceable by reason of prescription, and the traditional rule that a new promise to pay a prescribed debt must be made by the same person originally obliged or by someone lawfully authorized by that person.

Court's Reasoning on Enforceability

The Court examined the foundation of the present action and held that it was not based on the original obligation of the mother, which had prescribed, but on the separate obligation voluntarily contracted by the defendant on August 9, 1930 as evidenced by Exhibit B. The Court observed that, as sole heir of the original debtor, the defendant succeeded to the inheritance and that the original debt, though extinguished as a legal remedy by prescription, remained a moral obligation for him. The Court concluded that such a moral obligation furnished ad