Pelaez v. Abreu
REITERATIONFacts
The Antecedents: Plaintiff Procesa Pelaez sold a house and lot to defendant Flaviano Abreu under a contract of sale with pacto de retro for P14,000. The contract stipulated that Pelaez would continue to occupy the house as a tenant at P140 per month, and she was also to pay taxes and insurance premiums. The property was sold on August 23, 1901, and redeemed by Pelaez on December 16, 1902, a period of 15 months and 22 days. During this period, Pelaez occupied the property but paid no rent. Abreu paid taxes for 1901 (P186.19) and an insurance premium (P100). An oral agreement was made after the sale, allowing Abreu to rent out part of the premises to others and collect the rents, to be applied on the redemption price. Abreu collected P1,150 in this manner. On December 16, 1902, Pelaez paid Abreu P16,500 for redemption, which the court found comprised P14,000 (redemption price) and P2,500 for rent. The court also found Pelaez had overpaid rent by P260 (actually P292.67), but Pelaez, despite believing the account presented by Abreu was incorrect, paid the full amount. Procedural History: The lower court rendered judgment in favor of Pelaez for P863.81 and denied Abreu affirmative relief. The judgment amount was calculated as follows: P1,150.00 (rent collected by defendant not credited to plaintiff), P100.00 (insurance premium paid by defendant), and P186.19 (taxes for 1901 paid by defendant), totaling P286.19, which was then subtracted from the P1,150.00 rent collected by the defendant, resulting in a balance of P863.81 in favor of the plaintiff. Neither party appealed the portion of the judgment regarding the overpayment of rent. The present appeal concerns the oral agreement for Abreu to lease parts of the premises and apply the rents to the redemption price, finding that no part of these collections was credited to Pelaez. The Petition: The defendant appealed the lower court's decision, primarily arguing that the lower court erred in overruling the demurrer to the complaint due to prescription and that the right of action had prescribed.
Issue(s)
Whether the lower court erred in overruling the demurrer to the complaint on the ground of prescription. Whether the right of action had prescribed, considering the oral agreement and the applicable statutes of limitations. Whether Article 1973 of the Civil Code or Section 50 of the Code of Civil Procedure governs the interruption or renewal of the prescription period.
Ruling
The judgment of the lower court is reversed, and the defendant is absolved from the demand. The portion of the judgment absolving the plaintiff from the demand for affirmative relief is affirmed upon the facts as found by the trial court. No costs are allowed.
Ratio Decidendi
On the issue of prescription and the applicability of Article 1973 of the Civil Code versus Section 50 of the Code of Civil Procedure: The Court held that Article 1973 of the Civil Code, which allows for the interruption of prescription by extrajudicial claims or acknowledgments of debt, is no longer in effect. It has been superseded by Section 50 of the Code of Civil Procedure, which provides that the right of action can only be renewed by payment, a written acknowledgment, or a written promise to pay signed by the debtor. The Court reasoned that Section 50 was intended by the Legislature to be the complete law on the subject of prescription of civil actions, and applying the supplementary provisions of the Civil Code would be unnecessary and redundant, as Section 50 encompasses all of Article 1973's provisions and more. Therefore, a verbal demand made by the plaintiff in 1905 or 1906 was insufficient to interrupt the running of the prescription period under Section 50. The Court emphasized that Section 50 restricts the acts that can renew the prescription period to written forms or actual payment, unlike Article 1973 which allowed for broader interpretations of interruption. The Court cited that Section 50 was taken from the Code of Ohio, indicating a legislative intent to adopt a more rigorous approach to prescription. On the issue of whether the right of action had prescribed: The Court found that the plaintiff's right of action accrued at least on December 16, 1902, when the property was redeemed. The action was filed on November 15, 1909. The oral agreement, being distinct from the written contract of sale with pacto de retro, constituted a new and independent contract. Under Section 43 of the Code of Civil Procedure, actions upon a contract not in writing must be brought within six years after the right of action accrues. Since the verbal demand made by the plaintiff did not interrupt prescription under Section 50, the six-year period expired prior to the institution of the action. Consequently, the plaintiff's claim was barred by operation of law. On the issue of the lower court's overruling of the demurrer: The Court stated that the settled practice in the jurisdiction is that the question of prescription cannot be raised by demurrer but must be pleaded in the answer. While the defense of prescription was duly raised by the answer, the Court found that the action was indeed barred by prescription based on the substantive merits of the case, thus reversing the lower court's decision on this procedural point as well.
Main Doctrine
Article 1973 of the Civil Code, which provides for the interruption of prescription by extrajudicial claim or acknowledgment of debt, is no longer in effect and has been superseded by Section 50 of the Code of Civil Procedure, which requires written acknowledgment or payment to renew the period of prescription. A verbal demand is insufficient to interrupt prescription.