Case Summary (G.R. No. 142420)
Key Dates
The events giving rise to the complaint began with the signing of a continuing Surety Agreement on August 19, 1981. Trust Receipt No. 63725 was executed on December 3, 1982, while Trust Receipt No. L-17572 was signed on February 14, 1983. The complaint was filed on July 27, 1993, leading to the ultimate decision rendered by the Supreme Court on January 29, 2007.
Applicable Law
The primary legal framework governing this case is derived from the 1987 Philippine Constitution and the Civil Code, particularly Article 1144 regarding the prescription of actions based on written contracts and Article 1155 concerning the interruption of prescription due to demands or judicial proceedings.
Factual Background
Diamond Seafoods Corporation executed two Trust Receipts with PBCom, obligating itself to either sell specific merchandise and remit the proceeds by specified dates or return the unsold goods. Following the failure to fulfill these obligations, the outstanding debt grew to P327,844.03 by June 15, 1983. While PBCom filed a criminal complaint against the respondents for violations of the Trust Receipts Law, this was dismissed for lack of prosecution. Consequently, PBCom initiated a civil suit seeking recovery of the sum owed.
Trial Court Proceedings
In the Regional Trial Court of Manila, Branch 55, the complaint was dismissed on February 18, 1994, due to the invocation of the prescription defense by the respondents. The trial court found that since the action was filed over ten years post-maturity of the Trust Receipts, prescription had indeed set in, referencing Article 1144 of the Civil Code.
Court of Appeals Ruling
On May 30, 1997, the Court of Appeals affirmed the trial court's ruling, emphasizing that the prescriptive period, which is ten years for such obligations, began upon the maturity date of the Trust Receipts and was not interrupted by the earlier criminal complaint, which was filed but subsequently dismissed.
Supreme Court Decision
PBCom's petition to the Supreme Court contended that the appellate court and trial court erred in applying the wrong provision regarding the interruption of prescription. PBCom argued that its purported demands should have interrupted the prescriptive period as outlined in Article 1155 of the Civil Code. However, the Supreme Court held that because the demand letters were never effectively received by the respondents, these could n
...continue readingCase Syllabus (G.R. No. 142420)
Case Background
- This case involves a petition for review under Rule 45 of the Rules of Court filed by the Philippine Bank of Communications (PBCom) against Diamond Seafoods Corporation and its representatives, including Romeo V. Jacinto, Francisco Yu, and Sheolin Yu.
- The petitioner seeks to set aside the May 30, 1997 Decision of the Court of Appeals (CA) in CA-G.R. CV No. 45054, which affirmed the dismissal of PBCom's complaint by the Regional Trial Court (RTC) of Manila, Branch 55, based on the grounds of prescription.
Factual Context
- On August 19, 1981, Diamond Seafoods Corporation, represented by Jacinto and Yu, executed a continuing Surety Agreement with PBCom, binding themselves to pay for credit accommodations.
- Specific Trust Receipts were issued on December 3, 1982, and February 14, 1983, obligating Diamond Seafoods to hold merchandise in trust for PBCom, with a requirement to sell the goods and remit proceeds by specified dates (March 3, 1983, and May 15, 1983).
- The defendants failed to comply with the conditions of the Trust Receipts, resulting in an outstanding obligation of P327,844.03 as of June 15, 1983.
Legal Proceedings
- PBCom filed a comp