G.R. No. L-15547. February 29, 1964.
Republic of the Philippines, plaintiff-appellee, vs. Joseph Arcache, et al., defendants-appellants.

FACTS

The Republic filed an action for the forfeiture of a surety bond executed by Joseph Arcache (principal) and Globe Assurance Co., Inc. (surety) to secure payment of Arcache’s income tax deficiency for 1946. Arcache defended on grounds of prescription and alleged he was compelled to execute the bond to obtain a tax clearance for travel. The surety company separately argued the bond became void for lack of premium payment and was subject to an injunction. The lower court rendered judgment against both defendants, holding them jointly and severally liable for the tax amount. Arcache appealed.
The factual backdrop reveals Arcache’s 1946 income tax was investigated using the net worth method, leading to a 1953 final assessment. Arcache, through correspondence, acknowledged this liability, requested extensions, and made partial payments. Crucially, to secure an extension for payment, he executed the surety bond in 1954. He later defaulted, prompting the government’s action on the bond in 1958.

ISSUE

Whether Arcache’s defense of prescription against the collection of his 1946 income tax is valid, considering his execution of a surety bond and other acts acknowledging the debt.

RULING

The Supreme Court affirmed the lower court’s decision, rejecting the defense of prescription. The legal logic is multi-faceted. First, the principle of estoppel applies. Arcache requested extensions for payment from the Bureau of Internal Revenue, which the government granted. A party who requests and causes a delay cannot subsequently invoke the lapse of time as a defense. The Court cited the doctrine that “he who prevents a thing from being done may not avail himself of the non-performance which he has himself occasioned.”
Second, Arcache’s actions constituted a clear acknowledgment of the debt, which effectively interrupted or waived the prescriptive period. He admitted the obligation in writing, promised payment repeatedly, and made partial payments of P2,000 and P1,000. These acts occurred even after the alleged prescriptive date, renewing the obligation.
Third, the nature of the action itself is pivotal. The suit is not a direct collection of tax but an enforcement of a written contractual obligation—the surety bond. The prescriptive period for such an action is ten years, which had not elapsed when filed. Jurisprudence establishes that recovery on a bond given for tax payment is permissible even if the direct tax collection might otherwise be time-barred.
Finally, the Court aligned this case with its precedent in Sambrano vs. Court of Tax Appeals, which held that executing a security instrument like a chattel mortgage (or, by analogy, a surety bond) acknowledging a tax debt constitutes a renewal of the obligation and a waiver of the prescription defense. Thus, Arcache was estopped from raising prescription.