G.R. No.

L-48889 May 11, 1989

Development Bank of the Philippines (DBP), petitioner
vs.
The Honorable Midpaintao L. Adil, Judge of the Second Branch of the Court of First
Instance of Iloilo and Spouses Patricio Confesor and Jovita Villafuerte, respondents

Ponente: Justice Emilio A. Gancayco

FACTS:
On February 10, 1940 spouses Patricio and Jovita obtained an agricultural loan from the
Development Bank of the Philippines (DBP) in the sum of P2,000.00, as evidenced by a
promissory note wherein they are both jointly and severally to pay said amount in ten equal
yearly amortizations. Because of failure to pay the obligation and the lapse of the ten-year
period, Patricio, who was a member of the Congress, executed a second promissory note on
April 11, 1961 promising to pay the outstanding amount on or before June 15, 1961. In said note,
he also expressly claimed that upon failure to do so, he agrees to the foreclosure of their
mortgage.
As the promised period had lapsed with the spouses yet again failed to pay, DBP now
filed a complaint on September 11, 1970 in the City Court of Iloilo City against the respondents
for the payment of the loan. The Trial Court ruled in the DBP’s favor, ordering the spouses to
pay the loan plus interest from the date the Complaint was filed. However, in their motion for
reconsideration, the CFI of Iloilo reversed the decision and dismissed said case, claiming that
said obligation had already prescribed as provided by the first promissory note between the two
parties.
From this, DBP filed a petition for certiorari, contending that the decision of respondent
Judge Midpaintao L. Adil was contrary to law as he ignores Article 1112 of the Civil Code
wherein the right to prescription may be renounced or waived. Said waiver of the right to the
prescription was done by Patricio when he executed a second promissory note and from it, he
binds the obligation to the conjugal partnership.

ISSUES:
1. Whether or not the right to prescription has been renounced or waived by the
petitioner.
2. Whether or not the obligation is chargeable to the conjugal partnership of the spouses.
RULING:
1. YES. The Court ruled that respondent judge erred in his ruling as the execution of the
second promissory note by Patricio results in the waiver of the prescription set in the first one.
From this, the recognition of the outstanding debt from the first contract and the express promise
to pay it after the same has prescribed entails the second contract to be valid and enforceable.
2. YES. Under Article 165 of the Civil Code, the husband is the administrator of the
conjugal partnership. Thus, all the debts and obligations contracted by the husband for the
benefit of the conjugal partnership shall be chargeable to said partnership. In the case at bar, the
execution of respondent for said note to pay the debt in the interest of their loan thereby shows
that the conjugal partnership is liable for the payment of the debt.
COMMENT
This case highlights Article 1315 of the Civil Code, wherein contracts are perfected by
mere consent, and from that moment the parties are bound not only to the fulfillment of what has
been expressly stipulated but also to all the consequences which, according to their nature, may
be in keeping with good faith, usage and law.
Notwithstanding the waiver of the first contract, the second contract entered into by the
spouses with the DBP is clearly valid as Patricio himself expressly stipulated to fulfill the pre-
existing obligation by setting another period which shows his agreement on maintain the debt to
be paid by him. Lastly, he also consented to the foreclosure of their mortgage if he failed to pay
their debt, thus, he is bound to pay the DBP and to the consequences provided as secured in their
contract.