GR L 9396; (August, 1956) (Digest)
G.R. No. L-9396; August 16, 1956
MANILA MOTOR COMPANY, INC., plaintiff-appellee, vs. MANUEL T. FLORES, defendant-appellant.
FACTS
In May 1954, Manila Motor Company filed a complaint in the Municipal Court of Manila to recover from Manuel T. Flores the amount of P1,047.98, representing chattel mortgage installments that fell due in September 1941. The defendant pleaded that the action had already prescribed, noting the period from 1941 to 1954. The municipal court dismissed the complaint. On appeal, the Court of First Instance ruled in favor of the plaintiff, holding that the moratorium laws had interrupted the running of the prescriptive period. It deducted the time these laws were in operation (three years and eight months) and concluded that the ten-year prescriptive term had not yet elapsed when the action was filed in May 1954. The case was ordered returned to the municipal court for trial on the merits. The defendant appealed, arguing that the moratorium laws did not suspend the period of limitations because they were unconstitutional, as declared in Rutter vs. Esteban.
ISSUE
Did the moratorium laws have the effect of suspending the period of prescription for the plaintiff’s cause of action, notwithstanding their subsequent declaration as unconstitutional in Rutter vs. Esteban?
RULING
Yes. The Supreme Court affirmed the judgment of the Court of First Instance. It held that the moratorium laws suspended the period of prescription, citing its previous ruling in Montilla vs. Pacific Commercial. In response to the appellant’s argument based on the unconstitutionality of the laws, the Court clarified that while Rutter vs. Esteban declared the moratorium laws could no longer be validly applied at the time of that decision, the general rule that an unconstitutional statute is inoperative admits of equitable exceptions. The Court cited a resolution in Araneta vs. Hill, which noted that the actual existence of a statute prior to its declaration of unconstitutionality is an operative fact with consequences that cannot justly be ignored, and a realistic approach has eroded the general doctrine. Therefore, the prescriptive period was validly suspended by the moratorium laws. The order of the lower court was affirmed, without costs.