David v. Garlitos
REITERATIONFacts
The Antecedents: Kwong Ah Phoy and Co., Inc. obtained an overdraft accommodation from the Bank of the Philippine Islands, secured by a mortgage on its land. The corporation became insolvent, and its assets were assigned. The Bank foreclosed the mortgage, obtaining a judgment against the assignees. Petitioner Juan T. David acquired the Bank's rights to this judgment. Later, Atty. Vicente Sotto acquired the insolvent corporation's rights and deposited funds to settle claims, including the amount owed to David. Procedural History: Atty. Vicente Sotto attempted to pay David, but David refused the payment, allegedly due to the currency used. Sotto then deposited the payment in court and filed a case (Civil Case No. 193) to compel David to accept it and cancel the mortgage. David, in turn, sought execution of the foreclosure judgment (Civil Case No. 8726). The trial court deferred action on David's execution petition pending the outcome of Sotto's case. The case involving Sotto's payment attempt went through the trial court and the Court of Appeals, both finding the consignation invalid. The Supreme Court denied a petition for review. Subsequently, David again sought execution of the foreclosure judgment. The respondent Judge denied this, citing prescription. David filed the present petition for certiorari with mandamus. The Petition: Petitioner Juan T. David seeks a writ of certiorari and mandamus to compel the respondent Judge to issue a writ of execution for the decision in Civil Case No. 8726, arguing that the prescriptive period for execution was suspended.
Issue(s)
Whether the five-year period for execution by motion and the ten-year period for an independent action to enforce a judgment are suspended when a court orders the deferment of execution pending the resolution of a related case.
Ruling
The petition is granted. The order of the respondent Judge denying the petition for execution is set aside, and he is directed to issue the corresponding writ of execution.
Ratio Decidendi
On Issue 1: The Supreme Court held that the petition for execution filed by David on August 16, 1945, and the subsequent trial court order deferring action until Civil Case No. 193-J was decided, effectively suspended the running of the prescriptive period. Under Rule 39, Section 6 of the Rules of Court, a judgment is executable by motion within five years, but this rule presupposes that there is no legal barrier to its enforcement. Prescription can only operate when there is an enforceable right; however, when the enforceability of a final decision is suspended by court order or rendered conditional by pending litigation, prescription does not run. In this instance, the pendency of Sotto's suit (Case 193-J) regarding the validity of the tender of payment created an uncertainty that justified the court's 1945 deferment order. Applying the principle in Demetriou and Madrid vs. Lesaca, the Court emphasized that any time during which the right to execute is suspended by legal proceedings must be omitted in computing the limitations period. Thus, it was only after the final judgment in Case 193-J that the foreclosure judgment in Case 8726 regained its executory character, making David's 1953 petition timely.
Main Doctrine
The filing of a petition for execution and a court order deferring action thereon, particularly when the execution of the judgment is rendered conditional and uncertain by another pending suit, suspends the running of the prescriptive period for enforcing the judgment.