G.R. No. L-9729; April 24, 1957
THE BACHRACH MOTOR CO., INC., plaintiff-appellant, vs. CHUA TUA HIAN, defendant-appellee.

FACTS

On June 10, 1941, defendant Chua Tua Hian executed a promissory note in favor of plaintiff Bachrach Motor Co., Inc., for P2,252.32, representing the balance for a purchased automobile, payable in semi-monthly installments. As of December 9, 1941, an unpaid balance of P1,287.88 remained. The defendant defaulted on the installment due December 10, 1941. Plaintiff made demands for payment, the last being between 1948 and 1953. In reply to a demand, defendant’s counsel sent a letter dated September 30, 1948 (Exhibit B), stating the defendant had filed a war damage claim for the lost vehicle and requested more time to pay, assuring payment “as soon as he may conveniently do so.” Plaintiff filed the complaint to recover the debt on August 28, 1953. The Court of First Instance of Manila dismissed the complaint, holding the action was barred by the Statute of Limitations. Plaintiff appealed, arguing the debt moratorium laws suspended the statute and the 1948 letter interrupted it.

ISSUE

Whether plaintiff’s action to recover the debt is barred by the Statute of Limitations.

RULING

No, the action is not barred. The Supreme Court reversed the decision of the lower court. The running of the Statute of Limitations was suspended by the debt moratorium laws (Executive Orders Nos. 25 and 32) from March 10, 1945, to July 26, 1948—a period of two years, four months, and sixteen days. Deducting this suspension period from the time between the accrual of the cause of action (December 10, 1941) and the filing of the complaint (August 28, 1953), less than ten years had elapsed. The Court, following precedent, held that the moratorium laws validly tolled the statute. The decision did not rely on the defendant’s 1948 letter as an acknowledgment renewing the period. Defendant was ordered to pay the principal sum with 12% interest compounded yearly from December 10, 1941, plus attorney’s fees.