G.R. No. L-29900 June 28, 1974
IN THE MATTER OF THE INTESTATE ESTATE OF JUSTO PALANCA, Deceased, GEORGE PAY, petitioner-appellant, vs. SEGUNDINA CHUA VDA. DE PALANCA, oppositor-appellee.

FACTS

Petitioner George Pay is a creditor of the late Justo Palanca. His claim is based on a promissory note dated January 30, 1952, wherein Justo Palanca and Rosa Gonzales Vda. de Carlos Palanca jointly and severally promised to pay Pay the sum of P26,900.00 with 12% annual interest. The note stipulated payment “upon receipt by either of the undersigned of cash payment from the Estate of the late Don Carlos Palanca or upon demand.” After Palanca’s death in 1963, Pay filed a petition on August 26, 1967, seeking to have the surviving spouse, Segundina Chua Vda. de Palanca, appointed as administratrix of a specific property allegedly owned by the debtor. The objective was to bring the asset under court administration to facilitate the filing of his claim.
The lower court dismissed the petition. It ruled that the property in question no longer belonged to the debtor’s estate and that the surviving spouse validly refused appointment. Crucially, it held that Pay’s right of action had already prescribed. The court found that the obligation became immediately due and demandable from the execution of the note, as Pay expressly relied on the “upon demand” alternative. Since the petition was filed more than fifteen years after the note’s date, the ten-year prescriptive period for actions upon a written contract had lapsed.

ISSUE

Whether the creditor’s action to collect on the promissory note is barred by prescription.

RULING

Yes, the action has prescribed. The Supreme Court affirmed the lower court’s decision. The legal logic hinges on the nature of the obligation created by the promissory note. Under Article 1179 of the Civil Code, an obligation is demandable at once if its performance does not depend upon a future or uncertain event. The promissory note provided two alternative conditions for payment: receipt of funds from a specified estate, or upon demand. The petitioner explicitly informed the court that he was not insisting on the first condition and was claiming his right solely under the “upon demand” provision. Consequently, the obligation became pure and immediately demandable from the date of the instrument’s execution on January 30, 1952.
Following Article 1144(1) of the Civil Code, an action upon a written contract must be brought within ten years from the time the right of action accrues. Since the right to demand payment accrued in 1952, the filing of the petition in 1967, over fifteen years later, was indisputably beyond the prescriptive period. The Court, adhering to the express language of the Civil Code and consistent jurisprudence, found no error in the lower court’s application of the law on prescription. The other issues raised became moot in light of this dispositive finding.