Case Summary (G.R. No. 94374)
Factual Background
The defendant issued Membership Certificate No. 201 to Iwao Teruyama on December 2, 1942. The certificate was assigned to M. T. Reyes on April 22, 1944. Sometime later in 1944 M. T. Reyes transferred and assigned the same certificate to the plaintiff. After the war and the defendant's rehabilitation, the plaintiff sought to have the assignment registered in the club's books and to obtain a new certificate. The defendant refused to register the assignment and to issue a new certificate.
Trial Court Proceedings
The plaintiff filed suit against the defendant on April 26, 1955, in the Court of First Instance of Manila, praying that he be declared owner of one share and that the defendant be ordered to issue a new certificate. On June 6, 1955, the defendant moved to dismiss on the ground that the complaint was barred by the five-year prescription in Article 1149 of the Civil Code, asserting that the plaintiff's cause of action accrued in 1944. The trial court issued an order dismissing the complaint on July 30, 1955. The plaintiff's motions for reconsideration were denied, and the plaintiff appealed.
Issue Presented
The decisive legal question was whether the plaintiff was bound by the condition in the certificate and the defendant's By-Laws, or by any statutory rule, to present and register the assignment within a definite or fixed period so that his action became barred by prescription before filing in 1955.
The Parties' Contentions
The defendant maintained that the plaintiff's right to have the assignment registered accrued at the moment of the 1944 assignment and that the present action was therefore barred by the five-year prescriptive period of Article 1149. The defendant further intimated that postwar administrative actions affecting Japanese property, including vesting with the Alien Property Administration or Custodian, and subsequent actions by prewar American owners, bore upon the plaintiff's title. The plaintiff asserted that he only sought registration and recognition in 1955, and that the cause of action accrued upon the defendant's denial in 1955.
Ruling of the Supreme Court
The Court reversed the order of dismissal and remanded the case for further proceedings. The Court held that although the plaintiff's right to registration existed from the time of the assignment, no fixed period was imposed by the certificate condition or the By-Laws or by any statute which compelled immediate registration. The Court found that the cause of action accrued only when the defendant refused to register and recognize the assignment in 1955. Accordingly, the complaint filed on April 26, 1955 was not barred by the five-year prescription of Article 1149. Costs were awarded against the defendant.
Legal Basis and Reasoning
The Court distinguished the mere existence of a right from the requirement to exercise it within a prescribed period. It recognized that the certificate contained a condition that an assignment would not be effective against the club until registered in the books as provided by the By-Laws, but it concluded that this provision did not create a temporal limitation for the exercise of the right. The Court reasoned that prescription begins to run only when a right is violated or a cause of action accrues; the plaintiff's right was not violated until the defendant refused registration in 1955. The Court also treated the defendant's assertions concerning the Alien Property Administration and intervening claims
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Case Syllabus (G.R. No. 94374)
Parties and Procedural Posture
- LEE E. WON ALIAS RAMON LEE was the plaintiff and appellant who claimed ownership of one share of the defendant and sought issuance of a new membership certificate.
- WACK WACK GOLF & COUNTRY CLUB, INC. was the defendant and appellee, a non-stock corporation that refused to register the assignment and issue a new certificate.
- The action was filed in the Court of First Instance of Manila on April 26, 1955, seeking declaration of ownership and issuance of a new certificate.
- The defendant filed a motion to dismiss on June 6, 1955, asserting that the claim was barred by prescription under Article 1149 of the Civil Code.
- The trial court issued an order dismissing the complaint on July 30, 1955, and denied two motions for reconsideration filed by the plaintiff.
- The plaintiff appealed the dismissal to the Supreme Court.
Key Facts
- The defendant issued Membership Certificate No. 201 to Iwao Teruyama on December 2, 1942.
- The certificate was assigned to M. T. Reyes on April 22, 1944, and was thereafter transferred to the plaintiff in 1944.
- The certificate contained a condition that no assignment "shall be effective with respect to the club until such assignment is registered in the books of the club, as provided in the By-Laws."
- Shortly after the club's post-war rehabilitation the plaintiff requested registration of the assignment and issuance of a new certificate, but the defendant refused to register or issue a new certificate.
- The appealed order recited that the plaintiff sought registration on April 13, 1955, while the plaintiff alleged that the first demand and denial occurred in February 1955.
- The defendant asserted additional defenses that Japanese property holdings had been vested with the Alien Property Administration after liberation and that pre-war American owners had filed claims affecting rights.
Issue
- Whether the plaintiff's action to compel registration of the assignment and issuance of a new certificate was barred by prescription under Article 1149 of the Civil Code given the assignment in 1944 and the refusal to register in 1955.