GR 125167; (September, 2000) (Digest)
G.R. No. 125167 September 8, 2000
Producers Bank of the Philippines, Antonio M. Perry, and Tristan Catindig, petitioners, vs. Bank of the Philippine Islands and the Court of Appeals, respondents.
FACTS
On August 15, 1980, several stockholders of Producers Bank executed a deed of pledge covering their shares in favor of Ayala Investment & Development Corporation (AIDC) to secure an obligation. AIDC notified Producers Bank and requested the recording of the pledge, but the bank refused, claiming it had unilaterally appropriated the shares. After the obligation defaulted, AIDC conducted public auctions of the pledged shares. Having received no bids, AIDC appropriated the shares, executed an acquittance, and requested Producers Bank to cancel the old certificates and issue new ones in AIDC’s name. The bank refused.
AIDC filed a petition with the Securities and Exchange Commission (SEC), which ruled in its favor. However, the Court of Appeals later set aside this decision, holding the SEC lacked jurisdiction, a ruling affirmed by the Supreme Court. Meanwhile, Bank of the Philippine Islands (BPI) acquired AIDC’s rights through a merger. On February 9, 1989, BPI filed a complaint for specific performance and damages against Producers Bank in the Regional Trial Court. The trial court dismissed the complaint, citing prescription and lack of cause of action. The Court of Appeals reversed this dismissal and remanded the case, prompting this petition.
ISSUE
Whether BPI’s complaint for specific performance, filed in 1989, is barred by the statute of limitations.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals. The prescriptive period for an action is determined by the nature of the cause of action as alleged in the complaint. BPI’s complaint was founded on the written deed of pledge executed in August 1980. Under Article 1144 of the Civil Code, actions upon a written contract prescribe in ten years. The cause of action accrued from the time of Producers Bank’s refusal to honor the pledge and subsequent refusal to issue new stock certificates to AIDC (and later BPI as successor). Since the refusal occurred in 1981 and the complaint was filed in 1989, the action was commenced well within the ten-year prescriptive period. Therefore, the Court of Appeals correctly ruled that the action had not prescribed and properly ordered the remand of the case to the trial court for further proceedings on the merits.