Facts:

• Defendant Wang Wan Tat executed a promissory note in favor of plaintiff International Tobacco Co., Inc.
• The promissory note stated that the defendant would pay the plaintiff the sum of P5,000.00 on four equal installments for a period of twelve months, starting on December 10, 1956.
• Defendant Wang Wan Tat and co-defendant Pek Hock Leng executed a surety bond, stating that if the principal (Wang Wan Tat) failed to pay the installments, the surety (Pek Hock Leng) would immediately pay the full amount to the plaintiff.
• On June 28, 1957, the plaintiff filed a complaint for collection of the amount, including interest and attorney's fees, with the Court of First Instance of Manila.
• Defendants filed a motion to dismiss the complaint, claiming that the promissory note was not yet due and demandable, and therefore, the action was premature.
• The lower court granted the motion to dismiss, stating that the complaint did not state a cause of action because the promissory note had not yet matured.

Issue:

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Ruling:

• The failure to pay any of the installments within the year constitutes a breach and a valid cause of action.
• The lower court's dismissal of the complaint was deemed erroneous.
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Ratio:

• The Court based its decision on the terms of the surety bond, which stated that the sum of P5,000.00 was payable on four equal installments for a period of twelve months, starting on December 10, 1956.

• The Court concluded that the failure to pay any of the installments within the respective quarter, within the year, constituted a breach and gave rise to a cause of action.

• The condition of the surety bond stated that if the principal failed to pay the obligation as stipulated, the whole amount became immediately demandable against the defendant surety.

• Since not a single quarterly installment was paid within the year, the Court found that the plaintiff had a valid cause of action.

• The Court als...continue reading