G.R. No. 142420 . January 29, 2007.
PHILIPPINE BANK OF COMMUNICATIONS, Petitioner, vs. DIAMOND SEAFOODS CORPORATION, ROMEO V. JACINTO, FRANCISCO YU & SHEOLIN YU, Respondents.

FACTS

Petitioner Philippine Bank of Communications (PBCom) filed a civil complaint for sum of money against respondents on July 27, 1993. The action was based on two trust receipts executed by respondent corporation, with individual respondents as sureties, dated December 3, 1982 and February 14, 1983, with maturity dates of March 3, 1983 and May 15, 1983, respectively. Respondents defaulted on their obligations. Prior to the civil suit, PBCom filed a criminal complaint for violation of the Trust Receipts Law (PD 115) with the Manila City Fiscal’s Office on August 19, 1983, which was dismissed for failure to prosecute on January 16, 1985.
The Regional Trial Court dismissed the civil complaint on the ground of prescription, finding that the ten-year prescriptive period for actions based on a written contract under Article 1144 of the Civil Code had lapsed. The Court of Appeals affirmed the dismissal, albeit applying Act No. 3326 (the law on prescription of violations penalized by special laws) instead of the Civil Code, and ruled that the filing of the criminal complaint with the fiscal’s office did not interrupt the prescriptive period for the civil action.

ISSUE

Whether the Court of Appeals erred in affirming the dismissal of the civil complaint on the ground of prescription.

RULING

The Supreme Court denied the petition and affirmed the dismissal. The prescriptive period for filing the civil action based on the written trust receipts is ten years under Article 1144(1) of the Civil Code. The period commenced from the maturity dates of the obligations (March 3 and May 15, 1983). The filing of the complaint with the City Fiscal’s Office did not interrupt the running of this prescriptive period. Interruption under Article 1155 of the Civil Code requires either judicial proceedings, a written extrajudicial demand by the creditor, or a written acknowledgment of the debt by the debtor. A complaint filed with the prosecutorial office for preliminary investigation is not a judicial proceeding that interrupts civil prescription. Consequently, the civil action filed only on July 27, 1993, was barred by prescription, having been filed more than ten years after the cause of action accrued. The Court corrected the appellate court’s erroneous reference to Act No. 3326 , which governs prescription of criminal actions under special laws, not civil actions for breach of contract. However, this error did not affect the correct outcome of the case.