DBP v Judge Adil, Sps. Patricio Confessor and Jovita Villafuerte GR No.

L-48889 5/11/1989 Facts of the case: This case arose from the action taken by DBP against the respondent spouses for the reason of the latters failure to pay for the 2,000 peso debt they acquired from the bank. The amount was secured by a promissory note executed jointly by the spouses. In the said note, the spouses agreed to pay thr amount in 10 equal annual amortizations. After the lapse of the 10 year period, Patricio Confessor, executed another promissory note stating that he will pay the outstanding amount of the loan, and in case of failure to pay, he agreed to have his mortgage foreclosed. The spouses indeed failed to honor their 2nd promissory note, DBP then filed a complaint against the spouses. The court ruled in favor of DBP, and ordered the spouses to pay the latter. Shortly, the spouses appealed the decision, and 2 years later, in 1978, the spouses acquired a favorable decision. DBP filed a motion for reconsideration now including the judge who rendered the decision, with the grounds that the judge refused to recognize the law that the right to prescription may be renounced or waived. Issue: Whether or not the right to prescription may be renounced or waived. Held: Yes. Ratio: Art. 1112. Persons with capacity to alienate property may renounce prescription already obtained, but not the right to prescribe in the future. Prescription is deemed to have been tacitly renounced when the renunciation results from acts which imply the abandonment of the right acquired. There is no doubt that prescription has set in as to the first promissory note of February 10, 1940. However, when respondent Confesor executed the second promissory note on April 11, 1961 whereby he promised to pay the amount covered by the previous promissory note on or before June 15, 1961, and upon failure to do so, agreed to the foreclosure of the mortgage, said respondent thereby effectively and expressly renounced and waived his right to the prescription of the action covering the first promissory note.

The court cited the case of Villaroel v Estrada stating: ... when a debt is already barred by prescription, it cannot be enforced by the creditor. But a new contract recognizing and assuming the prescribed debt would be valid and enforceable ... This is not a mere case of acknowledgment of a debt that has prescribed but a new promise to pay the debt. The consideration of the new promissory note is the pre-existing obligation under the first promissory note. The statutory limitation bars the remedy but does not discharge the debt.