[ G.R. No. 48049. October 18, 1948 ] 81 Phil. 622
[ G.R. No. 48049. October 18, 1948 ]
C.N. HODGES, PLAINTIFF-APPELLEE, VS. FELIX S. YULO, DEFENDANT-APPELLANT. D E C I S I O N
PARAS, J.:
As attorney-in-fact of Paz Salas and Carlota Salas, the herein defendant-appellant (Felix S, Yulo) obtained a loan from the herein plaintiff-appellee (C. N. Hodges) in the amount of P28,000.00 for which a mortgage on certain real estate owned by appellant’s principals was executed in favor" of the appellee on March 27, 1926, Of said loan, the appellant applied the sum of P10,188.29 to the payment of his personal indebtedness to the appellee consisting of two promissory notes which matured on November 29, 1920, and December 7, 1920, and of the first instalment of the price of certain, property bought by the appellant from the appellee. Upon breanh of the mortgage, a foreclosure Action was instituted by the appellee against Paz Salas and Oarlota Salas which was in the main decided against the appellee in the Court of First Instance of Negros Occidental. Upon appeal, the Supreme Court rendered judgment on October 21, 1936, holding that the application by the appellant of the sum or P10,188.29 to his personal account was beyond his authority granted in the power of attorney executed by Paz Salas and Carlota Salas and hat the latter were bound uo pay to the appellee the balance that actually inured to their benefit and credit, or only P17,811.71. On April 16, 1938, the appellee brought an action against the appellant for the recovery of the aforesaid P10,188.29. After trial, the Court of First Instance of Occidental Negros sustained appellee’s claim with respect to the sum of P8,188.29, applied by the appellant to his two promissory notes in favor of appellee, but disallowed the other item of P2,000.00 on the ground that the transaction to which it was applied by the appellant in partial payment was usurious; This judgment in now sought by the appellant to be reversed principally on the ground of prescription, defense also set up in, but overruled by the lower court.
Appellant contends that appellee’s action had prescribed, because it was not brought within ten years from 1920, the year when appellant’s two notes to which the amount of P8,188.29 was applied (Act 190, section 43), and because, even supposing chat appellee’s right of action was renewed on March 27, 1926, when said notes were paid out of the loan of P28,000.00 secured from the appellee on behalf of Paz Salas and Carlota Salas, said action was likewise not brought within ten years from March 27, 1926 (Act 190, section 50).
We have no hesitancy in ruling that the appellant has rightly invoked the statute of limitations, although the applicable provision is section 49 of Act 190 to the effect that “if, in an action commenced, or (attempted to be commenced, in due time, judgment for the plaintiff be reversed, or if the plaintiff fails otherwise than upon the merits, and the time limited for the commencement of such action has, at the date of such reversal or failure, expired, the plaintiff, or, if he die and the cause of action survive, his representatives may commence a new action within one year after such date, and this provision shall apply to any claim asserted in any pleading by a defendant.”
There can be little or no doubt that the appellee fell into the honest mistake of believing that when he sued Paz Salas and Carlota Salas for the full loan of P28,000.00 uovered by the mortgage signed by their attorney-in-fact (the appellant) on March 27, 1926, he was suing the right defendants. When the Supreme Court, in its decision of October 21, 1936, held that Paz and Carlota Salas were not liable for the P10,188.29 applied by the appellant to his personal account, the Court in effect ruled that, as to said item, appellee’s action was directed against the wrong defendants. In other words, with respect to the amount appropriated by the appellant, the appellee failed otherwise than upon the merits." Inasmuch as on the date of the promulgation of the decision of the Supreme Court (October 21, 1936), and the presumption is that final entry of judgment had been entered ten days thereafter, the time limited for the commencement of appellee’s action against appellant had expired, whether appellee’s right of action be computed from 1920 (maturity date of appellant’s two promissory notes which chad been paid off out of the loan of P28,000.00), or from March 27, 1946 (when appellant applied the amount in question to his personal debts), the appellee, under said section 49 of Act 190, had one year from the promulgation of the final judgment within which to commence a new fraction against the right defendant, or the appellant. ‘‘It appearing, however, that the action which is the subject of this appeal, was brought on April 16, 1938, or more than one year after October 21, 1936, the same had in fact prescribed.
The present case finds analogy in Whipple vs. Fardig et al., 146 Atl. 847, 849, although in the latter case the second suit was filed within the leaving period of one year. The Supreme Court of Errors of Connecticut said: “The finding presents the situation fairly for the plaintiff in the present case. It shows that he brought the first action rein the belief that the asbestos company was liable as the principal or master of the driver of the automobile. It was established by records and the testimony of officers of the company that this was not the fact. At that trial it developed for the first time who was the real owner of the car. The following day a suit was begun against that owner and her agent, the driver of the automobile. As the off icier was unable to find property of ohe defendants upon which to make an attachment until December 28, 1927, the present action was brought that day. The plaintiff has not been guilty of laches in pressing his claim. It is quite apparent that in the first action, she plaintiff by mistake named the wrong defendant. Under General Statutes 1918, section 6172, he was entitled within one year from the conclusion of the first action to bring another against these defendants, without running counter to the statute of limitations.”
It is not amiss to quote, if only to show what section 49 of Act 190 may also apply to a situation involving a wrong plaintiff, the following passage of the decision of this Court in Lacson de .arroyo vs. Visayan General Supply Co., 53 Phil. 438, 435: “It is entirely clear, we think, that Lucio Echaus, once vice-president and acting general manager of the Visayan General Supply Supply Co., Inc., had no authority to represent the corporation before the committee on claims. The effect of the dissolution of a corporation is to put an end to its existence for all purposes whatsoever, and to destroy all its faculties, with the result that thereafter it cannot maintain an action in court (Corpus Juris, 14—A, p. 1149, sec. 3083). The not of dissolution also terminated the faculty of its officers to represent it in litigation, and can be no sort of doubt that Lucio Echaus was without personality to represent or bind the defunct corporation. The action of the committee on claims in disallowing the claim, without considering it on its merits, was therefore not improper. Nevertheless, said action on the part of Lucio Echaus was evidently done in good faith, and with a view to the protection of the legitimate interest of the corporation with which he had formerly been connected.
In other words, such sin action was an attempt on his part to commence a legal proceeding that failed otherwise than upon the merits; and if the case were one falling precisely under section 49 of one Code of Civil Procedure, die corporation would undoubtedly have had the right to begin another action within the one year allowed in said section. But said section is not of direct application here, the sense of it cannot foil, by analogy, to influence the court upon the point now to be determined.”
Wherefore, the appealed judgment is reversed and the defendant-appellant absolved from one complaint. So ordered.
Feria, Pablo, Perfecto, Bengzon, and Briones, JJ., concur.