G.R. No. L-24318; August 29, 1969
BOARD OF LIQUIDATORS, Trustee of the LAND SETTLEMENT & DEVELOPMENT CORPORATION, plaintiff-appellee, vs. RICMA TRADING CORPORATION and RICARDO M. MAIPID, defendants, RICMA TRADING CORPORATION, defendant-appellant.

FACTS

The Board of Liquidators, as trustee of the defunct Land Settlement & Development Corporation (LASEDECO), filed a complaint in the Municipal Court of Manila to recover from Ricma Trading Corporation and its President, Ricardo Maipid, the sum of P2,800.00 as the unpaid balance of the purchase price of personal properties sold to them. The defendants moved to dismiss the complaint on the grounds of prescription (statute of limitations) and failure to state a cause of action against Maipid. They argued that the action, based on an oral contract, prescribed in six years from the last partial payment on October 24, 1955, making the August 15, 1962 filing untimely. The Municipal Court initially dismissed the action. After procedural motions and an amended decision from the Municipal Court, the plaintiff appealed to the Court of First Instance (CFI). In the CFI, the defendants again moved to dismiss on the same grounds and later moved to remand the case to the Municipal Court, arguing that the CFI’s jurisdiction on appeal was limited to reviewing the dismissal. The CFI denied these motions. The parties eventually submitted a stipulation of facts, agreeing on the sequence of events: the sale was awarded via Board Resolution No. 7173 dated October 14, 1955; properties were received on October 15, 1955; partial payments of P5,000 and P3,000 were made on October 15 and 24, 1955, leaving a P2,800 balance; to secure this balance, the defendant corporation posted a surety bond on December 28, 1956, which was renewed twice, expiring on December 28, 1957; and a final demand letter was sent on May 25, 1962. The case was submitted for decision on the questions of law raised in the pleadings.

ISSUE

Whether the plaintiff’s cause of action to recover the unpaid balance is barred by the statute of limitations.

RULING

No, the cause of action is not barred by prescription. The Supreme Court affirmed the CFI’s decision. The Court held that the action was based upon a written contract, which prescribes in ten years under Article 1144 of the Civil Code, not the six-year period for oral contracts. The contract was evidenced not by a single document but by several related writings: the extract of the minutes of the Board of Liquidators (Resolution No. 7173), the memorandum receipts for the properties, the official receipts for partial payments, the invoice receipt for delivery, and the surety bond and its renewals posted by the defendant. Taken together, these documents embodied all the elements and terms of the purchase and sale agreement. The Court cited the precedent in Peralta de Guerrero vs. Madrigal Shipping Co., Inc., noting that an action can be based on a written contract even if the agreement is contained in multiple related writings. Furthermore, the Court took judicial notice that contractual transactions with government instrumentalities are invariably in writing. Since the cause of action accrued at the latest upon the expiration of the last renewal of the surety bond on December 28, 1957, and the complaint was filed on August 15, 1962, the ten-year prescriptive period had not lapsed. The CFI judgment was affirmed.