Sps Larrobis V Phil Veterans
Sps Larrobis V Phil Veterans
DECISION
AUSTRIA-MARTINEZ, J : p
On March 23, 1985, the respondent bank went bankrupt and was placed
under receivership/liquidation by the Central Bank from April 25, 1985 until
August 1992. 3
On August 23, 1985, the bank, through Francisco Go, sent the spouses a
demand letter for "accounts receivable in the total amount of P6,345.00 as of
August 15, 1984," 4 which pertains to the insurance premiums advanced by
respondent bank over the mortgaged property of petitioners. 5
On August 23, 1995, more than fourteen years from the time the loan
became due and demandable, respondent bank filed a petition for extrajudicial
foreclosure of mortgage of petitioners' property. 6 On October 18, 1995, the
property was sold in a public auction by Sheriff Arthur Cabigon with Philippine
Veterans Bank as the lone bidder.
On April 26, 1996, petitioners filed a complaint with the RTC, Cebu City, to
declare the extra-judicial foreclosure and the subsequent sale thereof to
respondent bank null and void. 7
In the pre-trial conference, the parties agreed to limit the issue to whether
or not the period within which the bank was placed under receivership and
liquidation was a fortuitous event which suspended the running of the ten-year
prescriptive period in bringing actions. 8
On April 17, 1998, the RTC rendered its decision, the fallo of which reads:
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WHEREFORE, premises considered judgment is hereby rendered
dismissing the complaint for lack of merit. Likewise the compulsory
counterclaim of defendant is dismissed for being unmeritorious. 9
It reasoned that:
. . . defendant bank was placed under receivership by the Central
Bank from April 1985 until 1992. The defendant bank was given
authority by the Central Bank to operate as a private commercial bank
and became fully operational only on August 3, 1992. From April 1985
until July 1992, defendant bank was restrained from doing its business.
Doing business as construed by Justice Laurel in 222 SCRA 131 refers
to:
II
III
Petitioners further contend that: the demand letter, dated March 24,
1995, was sent after the ten-year prescriptive period, thus it cannot be deemed
to have revived a period that has already elapsed; it is also not one of the
instances enumerated by Art. 1115 of the Civil Code when prescription is
interrupted; 17 and the August 23, 1985 letter by Francisco Go demanding
P6,345.00, refers to the insurance premium on the house of petitioners,
advanced by respondent bank, thus such demand letter referred to another
obligation and could not have the effect of interrupting the running of the
prescriptive period in favor of herein petitioners insofar as foreclosure of the
mortgage is concerned. 18
Respondent for its part asserts that: the period within which it was placed
under receivership and liquidation was a fortuitous event that interrupted the
running of the prescriptive period for the foreclosure of petitioners' mortgaged
property; within such period, it was specifically restrained and immobilized from
doing business which includes foreclosure proceedings; the extra-judicial
demand it made on March 24, 1995 wiped out the period that has already
lapsed and started anew the prescriptive period; respondent through its
authorized deputy Francisco Go made the first extra-judicial demand on the
petitioners on August 23, 1985; while it is true that the first demand letter of
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August 1985 pertained to the insurance premium advanced by it over the
mortgaged property of petitioners, the same however formed part of the
latter's total loan obligation with respondent under the mortgage instrument
and therefore constitutes a valid extra-judicial demand made within the
prescriptive period. 20
In their Reply, petitioners reiterate their earlier arguments and add that it
was respondent that insured the mortgaged property thus it should not pass
the obligation to petitioners through the letter dated August 1985. 21
To resolve this petition, two questions need to be answered: (1) Whether
or not the period within which the respondent bank was placed under
receivership and liquidation proceedings may be considered a fortuitous event
which interrupted the running of the prescriptive period in bringing actions; and
(2) Whether or not the demand letter sent by respondent bank's representative
on August 23, 1985 is sufficient to interrupt the running of the prescriptive
period.
Anent the first issue, we answer in the negative.
It is true that we also held in said case that the period during which the
bank was placed under receivership was deemed fuerza mayor which validly
interrupted the prescriptive period. 30 This is being invoked by the respondent
and was used as basis by the trial court in its decision. Contrary to the position
of the respondent and court a quo however, such ruling does not find
application in the case at bar.
A close scrutiny of the Provident case, shows that the Court arrived at said
conclusion, which is an exception to the general rule, due to the peculiar
circumstances of Provident Savings Bank at the time. In said case, we stated
that:
Having arrived at the conclusion that a foreclosure is part of a
bank's business activity which could not have been pursued by the
receiver then because of the circumstances discussed in the Central
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Bank case, we are thus convinced that the prescriptive period was
legally interrupted by fuerza mayor in 1972 on account of the
prohibition imposed by the Monetary Board against petitioner from
transacting business, until the directive of the Board was nullified in
1981. 31 (Emphasis supplied.)
In this case, it is not disputed that Philippine Veterans Bank was placed
under receivership by the Monetary Board of the Central Bank by virtue of
Resolution No. 364 on April 25, 1985, pursuant to Section 29 of the Central
Bank Act on insolvency of banks. 33
Unlike Provident Savings Bank, there was no legal prohibition imposed
upon herein respondent to deter its receiver and liquidator from performing
their obligations under the law. Thus, the ruling laid down in the Provident case
cannot apply in the case at bar.
There is also no truth to respondent's claim that it could not continue
doing business from the period of April 1985 to August 1992, the time it was
under receivership. As correctly pointed out by petitioner, respondent was even
able to send petitioners a demand letter, through Francisco Go, on August 23,
1985 for "accounts receivable in the total amount of P6,345.00 as of August 15,
1984" for the insurance premiums advanced by respondent bank over the
mortgaged property of petitioners. How it could send a demand letter on
unpaid insurance premiums and not foreclose the mortgage during the time it
was "prohibited from doing business" was not adequately explained by
respondent.
Settled is the principle that a bank is bound by the acts, or failure to act of
its receiver. 34 As we held in Philippine Veterans Bank vs. NLRC, 35 a labor case
which also involved respondent bank,
. . . all the acts of the receiver and liquidator pertain to petitioner,
both having assumed petitioner's corporate existence. Petitioner
cannot disclaim liability by arguing that the non-payment of MOLINA's
just wages was committed by the liquidators during the liquidation
period. 36
However, the bank may go after the receiver who is liable to it for any
culpable or negligent failure to collect the assets of such bank and to safeguard
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its assets. 37
Having reached the conclusion that the period within which respondent
bank was placed under receivership and liquidation proceedings does not
constitute a fortuitous event which interrupted the prescriptive period in
bringing actions, we now turn to the second issue on whether or not the extra-
judicial demand made by respondent bank, through Francisco Go, on August
23, 1985 for the amount of P6,345.00, which pertained to the insurance
premiums advanced by the bank over the mortgaged property, constitutes a
valid extra-judicial demand which interrupted the running of the prescriptive
period. Again, we answer this question in the negative.
Prescription of actions is interrupted when they are filed before the court,
when there is a written extra-judicial demand by the creditors, and when there
is any written acknowledgment of the debt by the debtor. 38
Respondent's claim that while its first demand letter dated August 23,
1985 pertained to the insurance premium it advanced over the mortgaged
property of petitioners, the same formed part of the latter's total loan
obligation with respondent under the mortgage instrument, and therefore,
constitutes a valid extra-judicial demand which interrupted the running of the
prescriptive period, is not plausible.
The real estate mortgage signed by the petitioners expressly states that:
This mortgage is constituted by the Mortgagor to secure the
payment of the loan and/or credit accommodation granted to the
spouses Cesar A. Larrobis, Jr. and Virginia S. Larrobis in the amount of
ONE HUNDRED THIRTY FIVE THOUSAND (P135,000.00) PESOS ONLY
Philippine Currency in favor of the herein Mortgagee. 39
Considering that the mortgage contract and the promissory note refer
only to the loan of petitioners in the amount of P135,000.00, we have no reason
to hold that the insurance premiums, in the amount of P6,345.00, which was
the subject of the August 1985 demand letter, should be considered as
pertaining to the entire obligation of petitioners.
SO ORDERED.
Puno, Callejo, Sr. and Tinga, JJ ., concur.
Chico-Nazario, J ., is on leave.
Footnotes
The following actions must be brought within ten years from the time the
right of action accrues:
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(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
9. Id., p. 37.
10. Rollo , pp. 35–37.
11. Id., p. 42.
12. Id., p. 13.
13. G.R. No., Id., p. 14.
14. G.R. No. 97218, May 17, 1993, 222 SCRA 125.
44. Del Rosario vs . Court of Appeals, G.R. No. 118325, January 29, 1997, 267
SCRA 158, 172.
45. Id., p. 173