Permanent Savings and Loan Bank v. Velarde, G.R. No.

140608,
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[September 23, 2004], 482 PHIL 193-207

Petitioner's action for collection of a sum of money was based on a written
contract and prescribes after ten years from the time its right of action
arose. 35 The prescriptive period is interrupted when there is a written
extrajudicial demand by the creditors. 36 The interruption of the prescriptive
period by written extrajudicial demand means that the said period would
commence anew from the receipt of the demand. 37
Thus, in the case of The Overseas Bank of Manila vs. Geraldez, 38 the Court
categorically stated that the correct meaning of interruption as distinguished from
mere suspension or tolling of the prescriptive period is that said period would
commence anew from the receipt of the demand. In said case, the respondents
Valenton and Juan, on February 16, 1966, obtained a credit accommodation from
the Overseas Bank of Manila in the amount of P150,000.00. Written extrajudicial
demands dated February 9, March 1 and 27, 1968, November 13 and December
8, 1975 and February 7 and August 27, 1976 were made upon the respondents
but they refused to pay. When the bank filed a case for the recovery of said
amount, the trial court dismissed the same on the ground of prescription as the
bank's cause of action accrued on February 16, 1966 (the date of the manager's
check for P150,000.00 issued by the plaintiff bank to the Republic Bank) and the
complaint was filed only on October 22, 1976. Reversing the ruling of the trial court,
the Court ruled:
An action upon a written contract must be brought within
ten years from the time the right of action accrues (Art. 1144[1], Civil
Code). "The prescription of actions is interrupted when they are filed
before the court, when there is a written extrajudicial demand by the
creditors, and when there is any written acknowledgment of the debt by
the debtor" (Art. 1155, Ibid, applied in Gonzalo Puyat & Sons, Inc. vs. City
of Manila, 117 Phil. 985, 993; Philippine National Bank vs.Fernandez, L-
20086, July 10, 1967, 20 SCRA 645, 648; Harden vs. Harden, L-22174,
July 21, 1967, 20 SCRA 706, 711).
A written extrajudicial demand wipes out the period that has
already elapsed and starts anew the prescriptive period. Giorgi says:
"La interrupcion difiere de la suspension porque borra el tiempo
transcurrido anteriormente y obliga a la prescripcion a comenzar de
nuevo" (9 Teoria de las Obligaciones, 2nd Ed., p. 222). "La interrupcion .
. . quita toda eficacia al tiempo pasado y abre camino a un computo
totalmente nuevo, que parte del ultimo momento del acto interruptivo,
precisamente, como si en aquel momento y no antes hubiese nacido el
credito" (8 Giorgi, ibid pp. 390-2).|||

Respondent's obligation under the promissory note became due and

demandable on October 13, 1983. On July 27, 1988, petitioner's counsel
made a written demand for petitioner to settle his obligation. From the time
respondent's obligation became due and demandable on October 13, 1983,
up to the time the demand was made, only 4 years, 9 months and 14 days
had elapsed. The prescriptive period then commenced anew when
respondent received the demand letter on August 5, 1988. 39Thus, when
petitioner sent another demand letter on February 22, 1994, 40 the action still
had not yet prescribed as only 5 years, 6 months and 17 days had lapsed.
While the records do not show when respondent received
the second demand letter, nevertheless, it is still apparent that petitioner
had the right to institute the complaint on September 14, 1994, as it was
filed before the lapse of the ten-year prescriptive period. |||