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    DBP v. Confessor, 161 SCRA 307 (1988)

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    Berns
    The Supreme Court of the Philippines ruled that a second promissory note signed by a husband to repay a previously prescribed debt of the conjugal partnership is valid and makes the partnership liable. While the original 1940 debt was prescribed, the husband's 1961 note expressly acknowledging the debt and promising to repay it constituted a waiver of prescription under the Civil Code. As administrator of the partnership, debts contracted by the husband for its benefit, such as this new promise to pay, are obligations of the partnership. Therefore, the lower court erred in dismissing the case against both spouses.

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    DBP v. Confessor, 161 SCRA 307 (1988)

    Uploaded by

    Berns
    65 views5 pages
    The Supreme Court of the Philippines ruled that a second promissory note signed by a husband to repay a previously prescribed debt of the conjugal partnership is valid and makes the partnership liable. While the original 1940 debt was prescribed, the husband's 1961 note expressly acknowledging the debt and promising to repay it constituted a waiver of prescription under the Civil Code. As administrator of the partnership, debts contracted by the husband for its benefit, such as this new promise to pay, are obligations of the partnership. Therefore, the lower court erred in dismissing the case against both spouses.

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    The Supreme Court of the Philippines ruled that a second promissory note signed by a husband to repay a previously prescribed debt of the conjugal partnership is valid and makes the partnership liable. While the original 1940 debt was prescribed, the husband's 1961 note expressly acknowledging the debt and promising to repay it constituted a waiver of prescription under the Civil Code. As administrator of the partnership, debts contracted by the husband for its benefit, such as this new promise to pay, are obligations of the partnership. Therefore, the lower court erred in dismissing the case against both spouses.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    65 views5 pages

    DBP v. Confessor, 161 SCRA 307 (1988)

    Uploaded by

    Berns
    The Supreme Court of the Philippines ruled that a second promissory note signed by a husband to repay a previously prescribed debt of the conjugal partnership is valid and makes the partnership liable. While the original 1940 debt was prescribed, the husband's 1961 note expressly acknowledging the debt and promising to repay it constituted a waiver of prescription under the Civil Code. As administrator of the partnership, debts contracted by the husband for its benefit, such as this new promise to pay, are obligations of the partnership. Therefore, the lower court erred in dismissing the case against both spouses.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 5

    244 Phil.

    318

    FIRST DIVISION
    [ G.R. No. L-48889, May 11, 1988 ]
    DEVELOPMENT BANK OF THE PHILIPPINES (DBP),
    PETITIONER, VS. THE HONORABLE MIDPANTO L.
    ADIL, JUDGE OF THE SECOND BRANCH OF THE
    COURT OF FIRST INSTANCE OF ILOILO AND
    SPOUSES PATRICIO CONFESOR AND JOVITA
    VILLAFUERTE, RESPONDENTS.
    DECISION

    GANCAYCO, J.:

    The issue posed in this petition for review on certiorari is the validity of a
    promissory note which was executed in consideration of a previous
    promissory note the enforcement of which had been barred by prescription.

    On February 10, 1940 spouses Patricio Confesor and Jovita Villafuerte


    obtained an agricultural loan from the Agricultural and Industrial Bank
    (AIB), now the Development Bank of the Philippines (DBP), in the sum of
    P2,000.00, Philippine Currency, as evidenced by a promissory note of said
    date whereby they bound themselves jointly and severally to pay the
    account in ten (10) equal yearly amortizations. As the obligation remained
    outstanding and unpaid even after the lapse of the aforesaid ten-year period,
    Confesor, who was by then a member of the Congress of the Philippines,
    executed a second promissory note on April 11, 1961 expressly
    acknowledging said loan and promising to pay the same on or before June
    15, 1961. The new promissory note reads as follows --

    "I hereby promise to pay the amount covered by my promissory


    note on or before June 15, 1961. Upon my failure to do so, I
    hereby agree to the foreclosure of my mortgage. It is understood
    that if I can secure a certificate of indebtedness from the
    government of my back pay I will be allowed to pay the amount
    out of it."

    Said spouses not having paid the obligation on the specified date, the DBP
    filed a complaint dated September 11, 1970 in the City Court of Iloilo City
    against the spouses for the payment of the loan.

    After trial on the merits a decision was rendered by the inferior court on
    December 27, 1976, the dispositive part of which reads as follows:

    "WHEREFORE, premises considered, this Court renders


    judgment, ordering the defendants Patricio Confesor and Jovita
    Villafuerte Confesor to pay the plaintiff Development Bank of
    the Philippines, jointly and severally, (a) the sum of P5,760.96
    plus additional daily interest of P1.04 from September 17, 1970,
    the date Complaint was filed, until said amount is paid; (b) the
    sum of P576.00 equivalent to ten (10%) of the total claim by
    way of attorney's fees and incidental expenses plus interest at the
    legal rate as of September 17, 1970, until fully paid; and (c) the
    costs of the suit."

    Defendants-spouses appealed therefrom to the Court of First Instance of


    Iloilo wherein in due course a decision was rendered on April 28, 1978
    reversing the appealed decision and dismissing the complaint and counter-
    claim with costs against the plaintiff.

    A motion for reconsideration of said decision filed by plaintiff was denied


    in an order of August 10, 1978.

    Hence this petition wherein petitioner alleged that the decision of


    respondent judge is contrary to law and runs counter to decisions of this
    Court when respondent judge (a) refused to recognize the law that the right
    to prescription may be renounced or waived; and (b) that in signing the
    second promissory note respondent Patricio Confessor can bind the conjugal
    partnership; or otherwise said respondent became liable in his personal
    capacity.

    The petition is impressed with merit.


    The right to prescription may be waived or renounced. Article 1112 of Civil
    Code provides:

    "Art. 1112. Persons with capacity to alienate property may


    renounce prescription already obtained, but not the right to
    prescribe in the future.

    Prescription is deemed to have been tacitly renounced when the


    renunciation results from acts which imply the abandonment of
    the right acquired."

    There is no doubt that prescription has set as to the first promissory note of
    February 10, 1940. However, when respondent Confesor executed the
    second promissory note on April 11, 1961 whereby he promised to pay the
    amount covered by the previous promissory note on or before June 15,
    1961, and upon failure to do so, agreed to the foreclosure of the mortgage,
    said respondent thereby effectively and expressly renounced and waived his
    right to the prescription of the action covering the first promissory note.

    This Court had ruled in a similar case that -

    “x x x when a debt is already barred by prescription, it cannot be


    enforced by the creditor. But a new contract recognizing and
    assuming the prescribed debt would be valid and enforceable x x
    x.”[1]

    Thus, it has been held -

    "Where, therefore, a party acknowledges the correctness of a


    debt and promises to pay it after the same has prescribed and
    with full knowledge of the prescription he thereby waives the
    benefit of prescription."[2]

    This is not a mere case of acknowledgment of a debt that has prescribed but
    a new promise to pay the debt. The consideration of the new promissory
    note is the pre-existing obligation under the first promissory note. The
    statutory limitation bars the remedy but does not discharge the debt.

    "A new express promise to pay a debt barred x x x will take the
    case from the operation of the statute of limitations as this
    proceeds upon the ground that as a statutory limitation merely
    bars the remedy and does not discharge the debt, there is
    something more than a mere moral obligation to support a
    promise, to wit -- a pre-existing debt which is a sufficient
    consideration for the new promise; the new promise upon this
    sufficient consideration constitutes, in fact, a new cause of
    action."[3]

    "x x x x x It is this new promise, either made in express terms or


    deduced from an acknowledgement as a legal implication, which
    is to be regarded as reanimating the old promise, or as imparting
    vitality to the remedy (which by lapse of time had become
    extinct) and thus enabling the creditor to recover upon his
    original contract."[4]

    However, the court a quo held that in signing the promissory note alone,
    respondent Confesor cannot thereby bind his wife, respondent Jovita
    Villafuerte, citing Article 166 of the New Civil Code which provides:

    "Art. 166. Unless the wife has been declared a non compos
    mentis or a spendthrift, or is under civil interdiction or is
    confined in a leprosarium, the husband cannot alienate or
    encumber any real property of the conjugal partnership without
    the wife's consent. If she refuses unreasonably to give her
    consent, the court may compel her to grant the same."

    We disagree. Under Article 165 of the Civil Code, the husband is the
    administrator of the conjugal partnership. As such administrator, all debts
    and obligations contracted by the husband for the benefit of the conjugal
    partnership, are chargeable to the conjugal partnership.[5] No doubt, in this
    case, respondent Confesor signed the second promissory note for the benefit
    of the conjugal partnership. Hence the conjugal partnership is liable for this
    obligation.

    WHEREFORE, the decision subject of the petition is reversed and set


    aside and another decision is hereby rendered reinstating the decision of the
    City Court of Iloilo City of December 27, 1976, without pronouncement as
    to costs in this instance. This decision is immediately executory and no
    motion for extension of time to file motion for reconsideration shall be
    granted.

    SO ORDERED.

    Narvasa and Cruz, JJ., concur. Griño-Aquino, J., no part. The Confessors
    are my relatives.

    [1] Villaroel vs. Estrada, 71 Phil. 140.

    [2] Tauch
    vs. Gondram, 20 La. Ann. 156, cited on page 7, Vol. 4, Tolentino's
    New Civil Code of the Philippines.

    [3] Johnson vs. Evans, 50 Am. Dec. 669.

    [4] Mattingly vs. Boyd, 20 How (US) 128, 15 Led 845; St. John vs. Garrow,
    4 Port. (Ala) 223, 29 Am. Dec. 280. American Jurisprudence – Vol. 34, page
    233 (Statute of Limitations).

    [5] Article 161(1), Civil Code.

    Source: Supreme Court E-Library | Date created: November 11, 2014


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