G.R. No. L-21114 November 28, 1967
FEDERICO FERNANDEZ, plaintiff-appellant, vs. P. CUERVA and CO., defendant-appellee.

FACTS

Plaintiff Federico Fernandez was employed as a salesman by defendant P. Cuerva & Co. from March 1949 to October 1959. After his separation, he filed a claim on July 26, 1960, before Regional Office No. 4 of the Department of Labor (docketed as L. S. Case No. 2940) to recover unpaid salaries, commissions, and separation pay. While that case was pending, on December 17, 1962, he filed a similar complaint in the Court of First Instance of Manila (Civil Case No. 52946). The complaint alleged three causes of action: (1) recovery of P5,300.00 representing monthly deductions of P100.00 from his salary, which, along with a 10% commission, were verbally agreed to be retained by the company as a bond/deposit for goods he handled; (2) recovery of P4,770.00 corresponding to the withheld 10% commissions; and (3) recovery of P1,500.00 as separation pay. The defendant moved to dismiss on grounds of prescription and lack of jurisdiction. The lower court dismissed the complaint, holding that the first two causes of action (totaling P10,070.00 for unauthorized deductions/withheld commissions under the Minimum Wage Law) had prescribed under its three-year prescriptive period, and that the court lacked original jurisdiction over the third cause of action for separation pay (P1,500.00) due to the amount involved. Plaintiff’s motion for reconsideration, arguing that filing the claim with the Department of Labor suspended prescription, was denied.

ISSUE

1. When did the plaintiff’s right of action to recover the amounts withheld as a bond/deposit accrue for purposes of prescription?
2. Did the filing of the claim with the Regional Office of the Department of Labor suspend the running of the prescriptive period?

RULING

1. The right of action accrued in October 1959, when the plaintiff was separated from the service. The amounts withheld as a bond/deposit were answerable for merchandise entrusted to him during his employment. Therefore, his right to demand refund arose only when the bond was no longer needed upon his separation, not on a monthly basis during employment.
2. Yes, the filing of the claim with the Regional Office of the Department of Labor suspended the running of the prescriptive period. Although not a court, the regional office, under Section 25 of Reorganization Plan No. 20-A (promulgated December 10, 1956), was vested with original and exclusive jurisdiction over such money claims, conferring upon it judicial powers to adjudicate. Filing the claim there on July 26, 1960, constituted a judicial demand that interrupted prescription. This is equitable as the plaintiff acted diligently by filing with the agency then exclusively authorized to handle such claims. The subsequent declaration of unconstitutionality of Section 25 on June 30, 1961, does not negate the interruptive effect of the filing, as the plan was an “operative fact” presumed valid until annulled. Therefore, the first two causes of action had not prescribed. The case was remanded for further proceedings.