G.R. No. 212362 . March 14, 2018
JOSE T. ONG BUN, PETITIONER, VS. BANK OF THE PHILIPPINE ISLANDS, RESPONDENT.

FACTS

Petitioner Jose T. Ong Bun, through his late wife, purchased three Silver Custodian Certificates (CCs) from Far East Bank & Trust Company (FEBTC) in 1989, with a total face value of ₱750,000. The certificates contained provisions stating they were transferable only upon surrender of the instrument with a deed of assignment and that the holder could withdraw the deposited amount. After FEBTC merged with respondent Bank of the Philippine Islands (BPI) in 2000, petitioner discovered the physical certificates in his deceased wife’s safety vault in 2002. He then demanded payment from BPI.
BPI refused payment, asserting that all such certificates, including petitioner’s, had been fully paid upon their maturity in 1991 and were no longer outstanding in its records following the merger. It argued that surrender of the physical certificate was not a condition for payment. BPI also interposed the defense of prescription, contending that the action, filed in 2006, was barred as it arose from a written contract and the ten-year prescriptive period commenced from maturity in 1991. The Regional Trial Court ruled in favor of the petitioner, but the Court of Appeals reversed, dismissing the complaint.

ISSUE

Whether the Court of Appeals correctly dismissed petitioner’s complaint for collection of sum of money on the grounds of prescription and failure to prove the existence of an outstanding obligation.

RULING

Yes, the Supreme Court affirmed the dismissal. The Court held that an action upon a written contract prescribes in ten years from the time the right of action accrues. The right to demand payment under the certificates accrued upon their maturity, which was 25 months from their respective issuance dates in 1989, or by 1991 at the latest. Petitioner filed his complaint only in 2006, clearly beyond the ten-year prescriptive period. His claim that the prescriptive period was tolled because the certificates were not yet due and demandable as they were not surrendered is untenable. The certificates themselves stated the holder “can withdraw at anytime,” indicating the deposits were demandable, and the provision on surrender pertains to transfer, not to a condition for payment. Prescription had thus set in.
Furthermore, petitioner failed to substantiate his claim that the deposits remained unpaid. The custodian certificates are not proof of an existing debt but merely evidence that certificates of deposit were held in custody. The positive assertion of BPI, supported by its records showing no outstanding obligations from the merged entity, prevailed over petitioner’s mere possession of the physical certificates and negative evidence. Consequently, the action was correctly dismissed.