PERMANENT SAVINGS AND LOAN BANK vs. VELARDE G.R. NO. 140608 ; Septembe !"# !

004

$A%TS& Petitioner Bank wanted to recover a sum of money from Mariano Velarde amounting to 1M pesos plus interests and penalties. There was a promissory note dated September !"1#!$ pertinent to the loan. %n his &nswer" respondent disclaims any liability on the instrument" the receipt of the said amount of P1'Million shows that the amount was received by another person" not the herein defendant. (ence" no liability attaches and as further stated in the special and affirmative defenses that" assuming the promissory note e)ists" it does not bind much less is there the intention by the parties to bind the herein defendant. %n other words" the documents relative to the loan do not e)press the true intention of the parties. *n September +" 1##," petitioner bank presented its sole witness" &ntonio Mar-ue." the &ssistant /epartment Manager of the Philippine /eposit %nsurance 0orporation 1P/%02 and the designated /eputy 3i-uidator for petitioner bank" who identified the Promissory 4ote dated September !" 1#!$. &fter petitioner bank rested its case" respondent" instead of presenting evidence" filed with leave of court his demurrer to evidence" alleging the grounds that5 1a2 P3&%4T%66 6&%37/ T* P8*V7 %TS 0&S7 B9 P87P*4/78&407 *6 7V%/7407. 1b2 T(7 0&:S7 *6 &0T%*4" 0*403:/%4; &8;:74T% T(&T %T 7<%STS" %S B&887/ B9 P87S08%PT%*4 &4/=*8 3&0(7S.1> The trial court" in its /ecision dated ?anuary +" 1##+" found merit in respondent@s demurrer to evidence and dismissed the complaint including respondent@s counterclaims" without pronouncement as to costs. *n appeal" the 0ourt of &ppeals agreed with the trial court and affirmed the dismissal of the complaint in its /ecision dated *ctober A" 1###. The appellate court found that petitioner failed to present any evidence to prove the e)istence of respondent@s alleged loan obligations" considering that respondent denied petitioner@s allegations in its complaint. %t also found that petitioner bank@s cause of action is already barred by prescription.

'ELD& The pertinent rule on actionable documents is found in 8ule !" Section A of the 8ules of 0ourt which provides that when the cause of action is anchored on a document" the genuineness or due e)ecution of the instrument shall be deemed impliedly admitted unless the defendant" under oath" specifically denies them" and sets forth what he claims to be the facts. 8espondent@s denials do not constitute an effective specific denial as contemplated by law. %n the early case of Songco vs. Sellner" the 0ourt e)pounded on how to deny the genuineness and due e)ecution of an actionable document" vi..5 B This means that the defendant must declare under oath that he did not sign the document or that it is otherwise false or fabricated. 4either does the statement of the answer to the effect that the instrument was procured by fraudulent representation raise any issue as to its genuineness or due e)ecution. *n the contrary such a plea is an admission both of the genuineness and due e)ecution thereof" since it seeks to avoid the instrument upon a ground not affecting either. %n fact" respondent@s allegations amount to an implied admission of the due e)ecution and genuineness of the promissory note. The admission of the genuineness and due e)ecution of a document means that the party whose signature it bears admits that he voluntarily signed the document or it was signed by another for him and with his authorityC that at the time it was signed it was in words and figures e)actly as set out in the pleading of the party relying upon itC that the document was deliveredC and that any formalities re-uired by law" such as a seal" an acknowledgment" or revenue stamp" which it lacks" are waived by him. &lso" it effectively eliminated any defense relating to the authenticity and due e)ecution of the document. 0learly" both the trial court and the 0ourt of &ppeals erred in concluding that respondent specifically denied petitioner@s allegations regarding the loan documents The 0ourt also finds that petitioner@s claim is not barred by prescription. Petitioner@s action for collection of a sum of money was based on a written contract and prescribes after ten years from the time its right of action arose. The prescriptive period is interrupted when there is a written e)traDudicial demand by the creditors. The interruption of the prescriptive period by written e)traDudicial demand means that the said period would commence anew from the receipt of the demand.