GR 141508; (May, 2010) (Digest)
G.R. No. 141508 ; May 5, 2010
ROBERTO S. BENEDICTO and TRADERS ROYAL BANK, Petitioners, vs. MANUEL LACSON, et al., Respondents.
FACTS
Petitioners Roberto Benedicto and Traders Royal Bank (TRB) were sued by numerous sugar planters (respondents) for the collection of a sum of money. The respondents alleged that Benedicto, as President of the National Sugar Trading Corporation (NASUTRA), and TRB, as the depository bank, were liable for the proceeds from the sale of sugar shipped to the United States which were never remitted to them. The transactions occurred from 1980 to 1981. The respondents claimed that Benedicto, in conspiracy with TRB, diverted these proceeds for his own benefit.
The Regional Trial Court (RTC) dismissed the complaint on the ground of prescription, finding that the action, filed in 1988, was barred by the ten-year prescriptive period for written contracts. The Court of Appeals (CA) reversed the RTC, ruling that the action had not prescribed. The CA held that the applicable prescriptive period was four years for quasi-delict, which commenced only upon the discovery of the fraud in 1986. Petitioners elevated the case to the Supreme Court via a Petition for Review on Certiorari.
ISSUE
Whether the Court of Appeals erred in ruling that the respondents’ cause of action had not prescribed.
RULING
The Supreme Court denied the petition and affirmed the CA decision. The Court held that the applicable prescriptive period was four years, not ten. The complaint was essentially based on tort or quasi-delict, alleging that Benedicto and TRB, through fraud and conspiracy, diverted the sugar sale proceeds, causing damage to the respondents. A quasi-delict prescribes in four years from the discovery of the wrongful act.
The Court ruled that the four-year period commenced only upon the discovery of the fraud. The respondents alleged they discovered the diversion only in 1986 when a new NASUTRA board initiated an audit. Since the complaint was filed in 1988, the action was filed well within the four-year prescriptive period. The Court emphasized that in cases of fraud, the prescriptive period runs from the discovery of the fraud, not from the date of the transaction. The petitioners failed to prove that the respondents had actual or constructive knowledge of the fraud at an earlier date. Thus, the action was not time-barred.