Provident Savings Bank v. CA (G.R. No. 97218)

Facts:

Spouses Guarin obtained a loan from petitioner bank and as a security, executed a REM in its favor over a parcel of land. Then petitioner bank was placed under receivership until it was set aside. Guarin signified its willingness to pay its obligation in exchange for the mortgaged title. Petitioner bank could not release said title as it also served as security for another loan obtained by Guarin for his corporation. Private respondent Chua wrote petitioner bank saying that the mortgaged property was offered to him as payment of judgment he obtained against the Guarins. The Guarins sold the property to Chua with the latter assuming the obligations. Chua tried to pay the loan but petitioner would not release the title unless the second loan of Guarin was also settled.

Issue:

Whether or not a bank being placed under receivership interrupts the prescription of actions it may institute.

Ruling: YES.

When a bank is prohibited to do business by the Central Bank and a receiver is appointed for such bank, that bank would not be able to do new business, i.e., to grant new loans or to accept new deposits.

Having arrived at the conclusion that the foreclosure is part of bank’s business activity which could not have been pursued by the receiver then because of the circumstances discussed in the Central Bank case, we are thus convinced that the prescriptive period was legally interrupted by fuerza mayor in 1972 on account on the prohibition imposed by the Monetary Board against petitioner from transacting business, until the directive of the board was nullified in 1981. Indeed, the period during which the obligee was prevented by a caso fortuito from enforcing his right is not reckoned against him (Article 1154, New Civil Code). When prescription is interrupted, all the benefits acquired so far from the possession cease and when prescription starts anew, it will be entirely a new one. This concept should not be equated with suspension where the past period is included in the computation being added to the period after prescription is resumed. Consequently, when the closure of was set aside in 1981, the period of ten years within which to foreclose under Article 1142 of the New Civil Code began to run again and, therefore, the action filed on August 21, 1986 to compel petitioner to release the mortgage carried with it the mistaken notion that petitioner’s own suit foreclosure had prescribed.

(In contrast to Larrobis v. Phil Veterans Bank, this is an exception to the general rule because of peculiar circumstances)

*Click here for the Larrobis case

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