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Manila Motor Co., Inc. vs.

Flores (1956)
Facts:
The Manila Motor Company filed a complaint in Municipal court of Manila to
recover from Manuel Flores the amount of P1,047.98 as chattel mortgage
installments which fell due in September 1941.
-Defendant pleaded prescription: 1941 to 1954 (Note: Prescription is
acquiring/losing ownership/real rights thru the lapse of time).
-The complaint was dismissed.
-Manila Motor appealed to CFI, with thw contention:
*Petitioner's Contention:
1. Moratorium laws had interrupted the running of the prescriptive period,
and that deducting the time during the operation of the law (moratorium law
runs only for 3 years & eight months). Hense the 10-year term had not yet
elapsed when complainant sued in 1954.
Defendants Contention:
1. Moratorium laws did not suspend the period of limitations because it is
unconstitutional (He based this on the case Ruther vs. Esteban).
2. When a statute is adjudged unconstitutional it is as inoperative as if it had
never been passed, and no rights can be built upon it.
(.)ISSUE:
1. W/N the moratorium law suspended the period of prescription.
(.)RULING:
The court decided in favor of the petitioners. Although it has been ruled in the
Esteban's case that the moratorium law is unconstitutional, there are several
instances wherein courts, out of equity, have relaxed its operation or qualified
its effects 'since the actual existence of a statue prior to such decleration is
an operative fact, and may have consequences which cannot justly be
ignored' and a realistic approach is eroding the general doctrine.
(.)Doctrine Used:
/ Effect of Unconstitutional Statutes:
The actual existence of statutes prior to its decleration as unconstitutional, is
an operative fact and may have consequences which cannot justly be
ignored.
/ Doctrine of Operative Fact:
The law is recognized as uncostitutional but the effects of the
unconstitutional law prior to its declaration of nullity, may be left undisturbed
as a matter of equity and fair play.
(.)DISPOSITION - Judgment affirmed.

Ponente . .Chief Justice Paras.