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On May 9, 1912, Alejandro Callao, mother of Juan Villaroel, obtained a loan

of P1,000 from spouses Mariano Estrada and Severina payable after seven FACTS:
years. Alejandra died, leaving Juan Villaroel as sole heir, Spouses Mariano
On July 25, 1956, Primitivo Ansay et al filed against the Board of Directors of
Estrada and Severina also died, leaving Bernardino Estrada as sole heir. On
the National Development Company in the Court of First Instance of Manila
August 9, 1930, Juan Villaroel signed a document in which he declared to
a complaint praying for a 20% Christmas bonus for the years 1954 and 1955.
pay the debt of his deceased mother in the amount of P1,000 with legal
interest of 12% per annum. The Court of First Instance of Laguna ordered Appellants contend that there exists a cause of action in their complaint
Juan Villaroel to pay the amount of P1,000 with an interest of 12% per because their claim rests on moral grounds or what in brief is defined by law
annum since August 9, 1930 until full payment. Villaroel appealed. as a natural obligation.
ISSUE: Whether or not the right to prescription may be waived or Ansay et al. filed against NDC a complaint praying for a 20% Christmas bonus
renounced. for the years 1954 and 1955. The trial court dismissed the complaint
ratiocinating that a bonus is an act of liberality and the court takes it that it
HELD: Yes, right to prescription may be waived or renounced. As a general
is not within its judicial powers to command respondents to be liberal and
rule, when a debt has already prescribed, it cannot be imposed by the
that Ansay et al. admitted that NDC is not under legal duty to give such
creditor. However, a new contract which recognizes and assumes the
bonus and that the court has no power to compel a party to comply with a
prescribed debt is an exception, for it would be valid and enforceable.
moral obligation (Art. 142, New Civil Code.). Ansay et al. appealed and
Hence, a person who acknowledges the correctness of the debt and
argued that there exists a cause of action in their complaint because their
promises to pay it despite knowing that the debt has already prescribed,
claim rests on moral grounds or what in brief is defined by law as a natural
such as the case at bar, waived the benefit of the prescription.
ISSUE: Whether or not the present action may prosper notwithstanding the
ISSUE: Whether or not the Christmas bonus is demandable.
prescription of the action to recover the original debt?
HELD: No, it is not demandable. Appellants admit that appellees are not
HELD: Yes. The present action is not based on the original debt contracted
under legal obligation to give such claimed bonus and such grant only arises
by petitioner’s mother – which has already prescribed – but on petitioner’s
from a moral obligation or natural obligation. However, natural obligation is
undertaking on Aug 9 1930 to assume the original obligation. For the
only enforceable with the presence of the element of voluntary fulfillment
petitioner who is the sole heir of the original debtor with rights to the latter’s
by the obligor. In the case at bar, there has been no voluntary performance
inheritance, the debt legally contracted by his mother even if it has already
on the part of the appellees. Hence, the bonus is not demandable.
lost enforceability due to prescription, has become a moral obligation which
is a sufficient consideration to make the obligation he voluntarily assumed
on Aug 9 1930 enforceable and legally demandable.
DBP VS CONFESOR G.R. No. 48889 May 11, 1988 The Court ruled that 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.
On February 10, 1940, spouses Patricio Confesor and Jovita Villafuerte
The statutory limitation bars the remedy but does not discharge the debt. A
obtained an agricultural loan from Agricultural and Industrial Bank, now
new express promise to pay a debt barred ... will take the case from the
Development Bank of the Philippines, in the sum of P2,000, as evidenced by
operation of the statute of limitations as this proceeds upon the ground that
a promissory note of said date whereby they bound themselves jointly and
as a statutory limitation merely bars the remedy and does not discharge the
severally to pay the amount in ten equal yearly amortizations.
debt, there is something more than a mere moral obligation to support a
As the obligation remained unpaid even after the lapse if the ten-year promise, to wit a – pre-existing debt which is a sufficient consideration for
period, Confesor, who was then a member of the Congress of the the new the new promise; upon this sufficient consideration constitutes, in
Philippines, executed a second promissory note on April 11, 1961, expressly fact, a new cause of action.
acknowledging the said loan and promising to pay the same on or before
June 15, 1961.

The spouses still failed to pay the obligation on the specified date. As a
result, the DBP filed a complaint on September 11, 1970 in the City Court of
Iloilo City. The city court ordered payment from spouses. The CFI of Iloilo
reversed the decision. Hence, this petition.

ISSUE: Whether or not a promissory which was executed in consideration of

a previous promissory note which has already been barred by prescription
is valid.

HELD: Yes, the second promissory note is valid because the said promissory
note is not a mere acknowledgement of the debt that has prescribed
already. Rather, it is a new promise to pay the debt. A new promise is a new
cause of action. Although a debt barred by prescription is enforceable, a new
contract recognizing and assuming the prescribed debt would be valid and
enforceable. Prescription was renounced when Confessor signed the second
promissory note.

The right to prescription may be waived or renounced. Prescription is

deemed to have been tacitly renounced when the renunciation results from
acts which imply the abandonment of the right acquired.
Orense refused to do so. He claimed that the sale was void because it was
done without his authority and that he did not authorize his nephew to
enter into such contract.

During trial, Orense was presented as witness of the defense. He states that
the sale was done with his knowledge and consent. Because of such
testimony, it was ascertained that he did give his nephew, Duran, authority
to convey the land. Duran was acquitted of criminal charges and the
company demanded that Orense execute the proper deed of conveyance of
the property.

ISSUE: Whether or not Orense is bound by Duran’s act of selling the former’s

HELD: Yes. It was proven during trial that he gave his consent to the sale.
Such act of Orense impliedly conferred to Duran the power of agency. The
principal must therefore fulfill all the obligations contracted by the agent,
who acted within the scope of his jurisdiction.

Issue: whether or not OH is liable to GH for its unsettled account?

GUTIERREZ HERMANOS vs ORENSE G.R. No. 9188 December 4, 1914 Held:

FACTS: Yes, but only upon proper accounting of the expenses for the shipment of
rice and petroleum which were claimed to be overpriced.
On and before Februaru 14, 1907, Engracio Orense had been the owner of
a parcel of land in Guinobatan, Albay. When an agent in executing the orders and commissions of his principal
carries out the instructions he has received from his principal, and does not
On February 14, 1907, Jose Duran, a nephew of Orense, sold the property appear to have exceeded his authority or to have acted with negligence,
for P1,500 to Gutierrez Hermanos, with Orense’s knowledge and consent, deceit, or fraud, he cannot be held responsible for the failure of his principal
executed before a notary a public instrument. The said public instrument to accomplish the object of the agency.
contained a provision giving Duran the right to repurchase it for the same
price within a period of four years from the date of the said instrument. Since it was not proven that the price of the goods were overstated, thereby
defrauding OH, OH cannot escape the liability of paying GH for performing
Orense continued occupying the land by virtue of a contract of lease. the task given to him by OH as his principal.
After the lapse of four years, Gutierrez asked Orense to deliver the property
to the company and to pay rentals for the use of the property.