G.R. No. L-10232; February 28, 1958
CONVETS, INC., plaintiff-appellant, vs. NATIONAL DEVELOPMENT COMPANY, ET AL., defendants-appellees.

FACTS

On September 13, 1955, the Confederation of Filipino Veterans (CONVETS), a domestic corporation, filed a complaint in the Court of First Instance of Manila against the National Development Company (NDC), the Land Settlement and Development Corporation (LASEDECO), and the Board of Liquidators. The complaint sought recovery of the sum of P36,000 as agent’s commission on the sale of certain commodities from the “Caledonia Pile” of surplus goods. The amended complaint alleged that on July 13, 1949, the NDC Board of Directors accepted CONVETS’ firm offer to act as exclusive sales agent for all items of the Caledonia Pile, with a 10% straight commission on sales where plaintiff had a direct hand. It further alleged that plaintiff informed NDC it had found a buyer, Joseph Behr & Sons, Inc., and that through plaintiff’s direct intervention as sole agent, a contract of sale of about 4,000 tons of spare parts at P90 per ton was approved by the NDC Board on November 25, 1949, and later executed with payment made via an irrevocable letter of credit. A written agency agreement was entered into on February 8, 1950, with retroactive effect from July 13, 1949. Management of the Caledonia Pile was later transferred to LASEDECO and then to the Board of Liquidators. Despite demands, defendants refused to pay the commission. Defendants filed a motion to dismiss on the grounds that the complaint did not state a cause of action and that the action had prescribed. The lower court granted the motion to dismiss.

ISSUE

1. Whether the complaint stated a cause of action against the defendants.
2. Whether plaintiff’s action had prescribed.

RULING

1. Yes, the complaint stated a cause of action. The Supreme Court held that the allegations in the amended complaint—that plaintiff was appointed exclusive agent, found a buyer, intervened directly resulting in a consummated sale, and was denied the stipulated commission—constituted a cause of action for recovery of the commission. The lower court erred in considering documents attached to the complaint (annexes) to infer that the sale was not initiated by plaintiff or did not comply with certain terms. For a motion to dismiss based on lack of cause of action, only the facts alleged in the complaint must be considered. Any apparent conflict between the allegations and attached documents is a matter for trial, not for dismissal.
2. No, the action had not prescribed. Plaintiff’s claim is based on a written contract of agency. The right of action accrued on January 5, 1950 (five days after December 1949 sale, as commission was payable within the first five days of the month succeeding the sale). An action upon a written contract prescribes in ten years under Article 1144 of the New Civil Code. The complaint filed in 1955 was well within the prescriptive period. Furthermore, where it is not clear from the complaint when the cause of action accrued, prescription cannot be sustained on a mere motion to dismiss.
The order of dismissal was set aside and the case remanded to the lower court for further proceedings. No costs.