Philippine National Bank v. Buenaseda
REITERATIONFacts
The Antecedents: The Philippine National Bank (PNB) obtained an unsatisfied judgment against the Philippine Lumber Distributing Agency, Inc. (PLDAI) in a prior civil case. PNB was authorized to file the present action against Francisco Buenaseda (Buenaseda) to recover an unpaid balance for lumber materials purchased by Buenaseda from PLDAI in 1947. Buenaseda purchased lumber totaling P15,594.00, paid P11,568.35, leaving an unpaid balance of P4,025.85. The last payment was made on July 13, 1949. Procedural History: PNB filed the instant action on May 7, 1957. The Court of First Instance (CFI) of Manila dismissed the case, ruling that the action had prescribed. The CFI found that the sales orders and delivery receipts did not constitute written contracts, thus falling under the six-year prescriptive period for oral contracts. The case was appealed to the Court of Appeals, which elevated it to the Supreme Court due to the purely legal issues involved. The Appeal: The Philippine National Bank appealed the CFI's decision, arguing that the 21 sales orders and 69 delivery receipts issued in connection with Buenaseda's lumber purchases constituted written contracts. PNB contended that the action, filed in 1957, was within the ten-year prescriptive period for written contracts. Buenaseda maintained that these documents did not qualify as written contracts, and thus the action was barred by the six-year prescriptive period for oral contracts.
Issue(s)
Whether the sales orders and delivery receipts constitute written contracts for the purpose of the ten-year statute of limitations. Whether the plaintiff's action has prescribed.
Ruling
The Supreme Court affirmed the decision of the lower court. The Court ruled that the sales orders and delivery receipts in question do not constitute written contracts within the meaning of the ten-year statute of limitations. Consequently, the action filed by the Philippine National Bank was found to have prescribed under the six-year prescriptive period for oral contracts.
Ratio Decidendi
On Whether the sales orders and delivery receipts constitute written contracts for the purpose of the ten-year statute of limitations: The Court held that for a writing to be considered within the ten-year statute of limitations, it must contain either an express promise to pay or language from which a promise to pay arises by fair implication. The Court examined the exhibits and found that most delivery receipts did not contain prices or terms, and the language used did not indicate a promise to pay. Even those with prices lacked terms of payment or a clear promise to pay. Similarly, the sales orders, even those with the notation "charge to my account as usual," did not specify prices or terms, requiring extrinsic proof to establish the obligation. The Court reiterated that if the promise arises only upon proof of extrinsic facts or evidence aliunde, the writing is not within the purview of the statute. Therefore, these documents, standing alone or in combination, did not constitute complete written agreements. On Whether the plaintiff's action has prescribed: Based on the finding that the transactions were not evidenced by written contracts, the Court applied the six-year prescriptive period for oral contracts under Act 190. The last payment was made on July 13, 1949, and the complaint was filed on May 7, 1957. This period of over seven years exceeded the six-year prescriptive period. Thus, the action was deemed to have prescribed, and the dismissal by the lower court was affirmed.
Main Doctrine
The Supreme Court affirmed the lower court's ruling that sales orders and delivery receipts, which do not contain an express promise to pay or language from which a promise to pay arises by fair implication, do not constitute written contracts for the purpose of the ten-year statute of limitations. Consequently, actions based on such documents are governed by the six-year prescriptive period for oral contracts. The Court emphasized that if the promise to pay arises only upon proof of extrinsic facts or evidence aliunde, the writing is not within the purview of the ten-year statute.