Board of Liquidators v. Zulueta
REITERATIONFacts
The Antecedents: On November 23, 1955, a decision was rendered in Civil Case No. 22237 ordering Jose Zulueta (defendant-appellee) to pay the Land Settlement and Development Corporation (LASEDECO) P10,391.62 with 4% interest per annum from January 13, 1948, based on an amicable settlement. This judgment remained unsatisfied. Procedural History: Plaintiff-appellant, as trustee of LASEDECO, filed Civil Case No. 60112 on March 5, 1965, to revive the judgment. Summons could not be served on the defendant-appellee due to his elusiveness. The trial court dismissed Civil Case No. 60112 on March 12, 1966, for lack of interest to prosecute, without prejudice. A motion for reconsideration was denied. Plaintiff-appellant then filed a new complaint, Civil Case No. 65341, on May 10, 1966, also for revival of the judgment. Defendant-appellee moved to dismiss, arguing prescription. The trial court initially denied this motion, finding that the filing of Civil Case No. 60112 interrupted prescription. However, after the defendant-appellee presented his answer and counterclaim, and failed to appear for the continuation of the hearing, the trial court, in a decision dated December 27, 1968, dismissed Civil Case No. 65341, relying on Conspecto vs. Fruto and Oriental Commercial Co., Inc. vs. Jureidini, Inc., holding that the dismissal of the first action did not interrupt prescription. The motion for reconsideration was denied. The Petition: Plaintiff-appellant filed a petition for review, arguing that the trial court erred in dismissing the case on the ground of prescription.
Issue(s)
Whether the filing of Civil Case No. 60112 interrupted the ten-year prescriptive period to revive the judgment. Whether the dismissal of Civil Case No. 60112 for failure to serve summons, due to the defendant-appellee's elusiveness, tolled the prescriptive period. Whether the subsequent filing of Civil Case No. 65341 was within the prescriptive period.
Ruling
The Supreme Court reversed the decision of the trial court, holding that the action had not prescribed. The Court ordered the defendant-appellee to pay the plaintiff-appellant the sum of P10,391.62 with interest at four (4%) per cent per annum from January 13, 1948, until full payment.
Ratio Decidendi
On whether the filing of Civil Case No. 60112 interrupted the ten-year prescriptive period to revive the judgment: Article 1144 of the New Civil Code provides that an action based upon a judgment must be brought within ten (10) years from the time the right of action accrues, which is from the time the judgment becomes final and executory. In this case, the judgment became final on November 23, 1955. The first revival action, Civil Case No. 60112, was filed on March 5, 1965, which was within the ten-year period, as only 9 years, 3 months, and 12 days had elapsed. Article 1155 of the New Civil Code expressly provides that the prescription of action is interrupted when they are filed before the court, and such interruption lasts during the pendency of the action. This principle applies to the prescription of the action to revive or enforce a judgment. Therefore, the filing of Civil Case No. 60112 effectively suspended the running of the prescriptive period. On whether the dismissal of Civil Case No. 60112 for failure to serve summons, due to the defendant-appellee's elusiveness, tolled the prescriptive period: The trial court relied on Conspecto vs. Fruto and Oriental Commercial Co., Inc. vs. Jureidini, Inc., which held that dismissal or voluntary abandonment of an action leaves the parties in the same position as if no action had been commenced. However, the Court distinguished the present case, noting that the dismissal of Civil Case No. 60112 was not due to abandonment but to the inability to serve summons on the defendant-appellee, who was actively evading service. The Court cited Marc Donnelly vs. Court of First Instance of Manila, where a similar situation of elusiveness led to the dismissal of the first revival action without prejudice, and the Supreme Court held that the prescriptive period was interrupted. The plaintiff-appellant demonstrated due diligence in attempting to serve summons, and their efforts were thwarted by the defendant-appellee's evasiveness. Furthermore, the plaintiff-appellant acted promptly after the denial of their motion for reconsideration, filing the second action within a reasonable time. On whether the subsequent filing of Civil Case No. 65341 was within the prescriptive period: Given that the filing of Civil Case No. 60112 interrupted the prescriptive period, the period began to run again only after its dismissal on March 12, 1966. The plaintiff-appellant filed Civil Case No. 65341 on May 10, 1966. The Court found that the trial court erred in dismissing the second action. The Court also noted that written extra-judicial demands were made by the plaintiff-appellant on the defendant-appellee, which also serve to interrupt the period of prescription under Article 1155 of the Civil Code. Therefore, the action to revive the judgment was filed within the legally allowed period.
Main Doctrine
The filing of an action to revive a judgment interrupts the prescriptive period, even if the action is subsequently dismissed without prejudice, provided the dismissal was not due to abandonment or failure to prosecute with due diligence, and the subsequent action is filed within the original prescriptive period or within a reasonable time after dismissal.