G.R. No. L-16631 July 20, 1965
DEVELOPMENT BANK OF THE PHILIPPINES, plaintiff-appellant, vs. MANUEL S. OZARRAGA as administrator of the Intestate Estate of LEON CUÑAT, defendant-appellee.

FACTS

The Development Bank of the Philippines (DBP), as successor of the Agricultural and Industrial Bank, filed a foreclosure suit on July 13, 1959, against the administration of the Estate of Leon Cuñat. The indebtedness of P800.00 was incurred on August 7, 1941, secured by a mortgage, and payable in five yearly installments, with the last due on August 7, 1946. Leon Cuñat died in 1942, and no payments were made on the loan. The Court of First Instance of Agusan dismissed the complaint upon the defendant’s motion, holding that the action had prescribed. DBP appealed solely on the issue of prescription.

ISSUE

Whether the foreclosure action filed by DBP had prescribed.

RULING

Yes, the action had prescribed. The cause of action accrued on August 7, 1946, when the last installment became due. The prescription period was suspended by the debt moratorium (Executive Order No. 32) but was lifted by Republic Act No. 342 on July 26, 1948, as Leon Cuñat was not a war damage claimant. The ten-year prescriptive period under Act No. 190 began to run from July 26, 1948. The action filed on July 13, 1959, was beyond this period. The Court held that: (1) the alleged acts of Cuñat’s heirs inducing delay were factual issues not resolved and were deemed foregone by the direct appeal; (2) the filing of a petition for the appointment of an administrator on July 18, 1958, did not interrupt prescription, as it was not an action to enforce the debt; and (3) extrajudicial demand letters sent in 1950, 1952, and 1957 did not interrupt prescription, as under the applicable law ( Act No. 190 ), a written extrajudicial demand was not a ground for renewing a right of action, and Article 1155 of the New Civil Code was inapplicable to prescription already running before its effectivity. The order of dismissal was affirmed.