China Bank v CA

CHINA BANKING CORPORATION, petitioner, vs. HON. COURT OF APPEALS and ARMED FORCES AND POLICE SAVINGS & LOAN ASSOCIATION, INC. (AFPSLAI), respondents. 23 !n" 2##$ % !'!*'n+, !'!*'n+, J . FACTS: FACTS: R AFPSLAI filed a complaint for sum of money against P China Banking Corporation with RC !C Br "#$% P admitted &eing the registered owner of the 'ome (otes) which are instruments of inde&tedness issued in fa*or of Fund Centrum Finance) Inc% and were sold) transferred and assigned to R. P filed P filed +t, alleging that the real party in interest was FCFI -not .oined in the complaint/ and P was mere trustee of FCFI% RC: denied +t, and denied +R% CA: denied Petition for Certiorari and Prohi&ition SC: dismissed Petition Petition for Certiorari) under Rule $0 for &eing an improper remedy P filed another +t,) in*oking prescription% RC: denied for lack of merit 1 not apparent in the complaint 23( prescription had set in4 directed P to present its e*idence4 denied +R  1 there are conflicting conflicting claims on the issue of 23( issue has prescri&ed) full5&lown trial trial in order  CA: dismissed the Petition for Certiorari under Rule $0 ISSUE 23( ISSUE  23( the date of maturity of the instruments is the date of accrual of cause of action P: 6pon

the face of the complaint) prescription has set in% he 'ome (otes anne7ed to the pleading &earing a uniform maturity date of " ,ec #89 indicate the date of accrual of the cause of aciton% 'ence) Rs filing of the complain on "; Sept #88$ is way &eyond the prescripti*e period of #< years under (CC ##;;% Soriano v. Ubat : Prescripti*e period starts from the time when the creditor may file an action) not from the time he wishes to do so%

R: Prescription is not apparent in the complaint &ecause the maturity date of the 'ome (otes attached thereto is not the time of accrual of P=s action% Accrued Accrued only on "< >uly #880 when demand to pay was made on P% Since Since &oth RC and CA found that prescription is not apparent on the face of the complaint) such factual finding should &e &inding on SC%

SC: SC: CA *alidly dismissed the petition) there &eing no ?A, committed &y RC in denying P=s +t, on ground of prescription% Since a cause of action re@uires) as essential elements) not only a legal right of the plaintiff and a correlati*e duty of the defendant &ut also an act or omission of the defendant in *iolation of said legal right) the cause of action does not accrue until the party o&ligated refuses) e7pressly or impliedly) to comply with its duty% -#/ a right in fa*or of the plaintiff &y whate*er means and under whate*er law it arises or is created4 -"/ an o&ligation on the part of the named defendant to respect or not to *iolate such right4 and -/ an act or omission on the part of such defendant *iolati*e of the right of the plaintiff or constituting constituting a &reach of the o&ligation of the defendant to the plaintiff% It is only when the last element occurs that a cause of action arises% Accordingly) Accordingly) a cause of action on a written contract accrues only when an actual &reach or *iolation thereof occurs% R=s cause of action accrued only on "< >uly #880 when its demand for payment of the 'ome (otes was refused &y P% It was only at that time) and not &efore that) when the written contract was &reached and pri*ate respondent could properly file an action in court% he cause of action cannot &e said to accrue on the uniform maturity date of the 'ome (otes as petitioner posits &ecause at that point) the third essential element of a cause of action) namely) an act or omission on the part of petitioner *iolati*e of the right of pri*ate respondent or constituting a &reach of the o&ligation of petitioner to pri*ate respondent) had not yet occurred% he su&.ect 'ome (otes) in fact) specifically states that payment of the principal and interest due on the notes shall &e made only upon presentation for notation and3or surrender for cancellation of the notes% notes%# hus) the maturity date of the 'ome (otes is not controlling as far as accrual of cause of action is concerned% 2hat said date indicates is the time when the o&ligation matures) when payment on the (otes would commence) su&.ect to presentation) notation and3or cancellation of those (otes% he date for computing when prescription of the action for collection &egins to set in is properly a function related to the date of actual demand &y the holder of the (otes for payment &y the o&ligor) herein petitioner &ank% Since the demand was made only on >uly "<) #880) while the ci*il action for collection of a sum of money was filed on Septem&er ";) #88$) within a period of not more than ten years) such action was not yet &arred & y prescription%

1 Payment of the principal amount and interest due on this (ote shall &e made &y the Company at the principal office of the rustee rustee herein referred to or at such other office or agency that the Company may designate for the purpose) in such coin or currency of the Repu&lic of the Philippines as at the time of payment shall &e legal tender for payment of pu&lic and pri*ate de&ts) upon presentation for notation and3or surrender for cancellation of this (ote