G.R. No.

94093 August 10, 1993 FIRST CAUSE OF ACTION AGAINST FAR EAST

FAR EAST MARBLE (PHILS.), INC., LUIS R. TABUENA, JR. and 2. That on various dates and for valuable
RAMON A. TABUENA, petitioners, consideration, the defendant Far East received from
vs. Commercial Bank and Trust Company . . . now
HONORABLE COURT OF APPEALS and BANK OF PHILIPPINE merged with and into the plaintiff bank . . . several
ISLANDS, respondents. loans evidenced by promissory notes executed by
said Far East, photo copies of which are attached
Minerva C. genevea for petitioners. hereto and made integral parts hereof as Annexes
A, B and C.
Sabino B. Padilla IV for Bank of the Philippines Islands.
3. That said promissory notes . . . .have long
matured but despite repeated requests and
demands for payment thereof with interests and
related charges due, Far East has failed and refused
MELO, J.: to pay. The account due on said promissory notes
with interests and related charges as of 10
This has reference to a petition for review by certiorari seeking the September 1986 is P4,471,854.32 itemized in a
reversal of the decision of the Court of Appeals dated June 26, 1990, statement of account, copy of which is attached
in CA-G.R. CV No. 14404 (Bellosillo (P), Marigomen, Sempio-Diy, hereto and made a part hereof as Annex D
JJ.) which set aside the order of the Regional Trial Court of the
National Capital Judicial Region (Manila, Branch XIV), dated June 1, 4. That because of Far East's failure and refusal in
1987 and remanded the case to the court a quo for further bad faith to pay its long past due obligations under
proceedings on the grounds that the complaint for foreclosure of the promissory notes above alleged, plaintiff was
chattel mortgage with replevin had not prescribed and that, there constrained to file this suit . . .
being a cause of action, further proceedings, including the resolution
of the motion for summary judgment may be pursued.
SECOND CAUSE OF ACTION AGAINST FAR
EAST
The antecedent facts of the case may be chronicled as follows:
6. That on various dates and for valuable
On February 5, 1987, herein respondent Bank of the Philippines consideration, the defendant Far East received from
Islands (BPI) filed a complaint for foreclosure of chattel mortgage and was extended by . . . plaintiff
with replevin against petitioner Far East Marble (Phils.), Inc. (Far Bank . . . credit facilities in the form of Trust
East), Ramon A. Tabuena and Luis R. Tabuena, Jr. which was Receipts, photo copies of which are hereto attached
docketed as Civil Case No. 87-39345 of Branch XIV of the Regional and made integral parts hereof as Annexes E, F, G,
Trial Court of the National Capital Judicial Region stationed in H, I and J.
Manila.
7. That said Trust Receipts . . . have long matured
The complaint pertinently alleged: and despite repeated requests and demands for
payment thereof with interests and related charges defendants Ramon A. Tabuena and Luis R.
due Far East has failed and refused to pay. The Tabuena, Jr. have failed and refused to pay said Far
amount due on said Trust Receipts with interests East accounts and have already defaulted in
and related charges as of 10 September 1986 is their solidary obligation under said "continuing
P2,170,476.62 as itemized in a statement of Guaranty."
account, copy of which is attached hereto and made
an integral part hereof as 15. That because of the failure and refusal of
Annex K. defendants Ramon A. Tabuena and Luis R.
Tabuena, Jr. in bad faith to pay Far East's past due
8. That because of far East's failure and refusal to accounts under their solidary obligation stipulated in
pay its long past due obligations under the Trust said "Continuing Guaranty,". . . plaintiff has been
Receipts above alleged, plaintiff was constrained to constrained to file suit against them . . .
file this suit . . . (pp. 32-36, Rollo.)

xxx xxx xxx On March 10, 1987, Far East filed an answer with compulsory
counterclaim admitting the genuineness and due execution of the
10. That in September 1976 Far East executed in promissory notes attached as Annexes A, B, and C to the complaint,
favor of . . . plaintiff Bank . . . a Chattel Mortgage, but alleging further that said notes became due and demandable on
photocopy of which is attached hereto and made an November 19, 1976, respectively. On the basis of the maturity dates
integral part hereof as Annex L, to secure the of the notes, Far East thereupon raised the affirmative defenses of
payment of its loan obligations including interests prescription and lack of cause of action as it denied the allegation of
and related charges. . . the complaint that BPI had made previous repeated requests and
demands for payment. Far East claimed that during the more than 10
xxx xxx xxx years which elapsed from the dates of maturity of said obligations up
to the time the action for foreclosure of the chattel mortgage securing
said obligations was filed, it had not received from BPI or its
CAUSE OF ACTION AGAINST INDIVIDUAL predecessor any demand for payment and thus, it had "labored
DEFENDANTS RAMON A. TABUENA AND LUIS R. under the belief that they [the obligations] have already been written
TABUENA, JR. off" in the books of BPI. Moreover, Far East denied the genuineness
and due execution of the trust receipts and of the Statement of
13. That in September 1976, defendants Ramon A. Account (pp. 78-79, Rollo). A motion to hear affirmative defenses
Tabuena and Luis R. Tabuena, Jr. executed in favor was attached to the answer.
of . . . plaintiff Bank . . . a "continuing guaranty"
photocopy of which is attached hereto and made a On March 16, 1987, BPI filed an opposition to the motion to hear
part hereof as Annex M, whereby they bind affirmative defenses, alleging that its cause of action against Far
themselves, jointly and severally, to answer for the East have not prescribed, since within 10 years from the time its
loan obligations to the Bank of defendant Far East. cause of action accrued, various written extrajudicial demands
(attached thereto as Annexes "A" and
14. That despite requests and demands for their "A-1") were sent by BPI and received by Far East. Moreover, BPI
payment of Far East's long past due accounts, said offered several written documents whereby Far East supposedly
acknowledged its debt to BPI (Annexes "B" to "B-6). Withal, BPI An appeal therefrom was forthwith interposed by BPI, assailing the
maintained, the ten-years prescriptive period to enforce its written findings of the trial court with respect to its finding that BPI's cause of
contract had not only been interrupted, but was renewed. action has prescribed and the consequent denial of the motion for
summary judgment.
On the same date, BPI filed a motion for summary judgment on the
ground that since Far East had admitted the genuineness and due On June 26, 1990, the Court of Appeals rendered a decision setting
execution of the promissory notes and the deed of chattel mortgage aside the June 1, 1987 order of the court of origin and remanding the
annexed to its complaint, there was no genuine issue as to any case to said court for further proceedings, "including the resolution
material fact, thus entitling BPI to a favorable judgment as a matter anew of plaintiff's motion for summary judgment . . ., reception of the
of law in regard to its causes of action and on its right to foreclose evidence of the parties and, thereafter, to decide the case as the
the chattel mortgage. facts may warrant." (pp. 98-99, Rollo.)

On June 1, 1987, the trial court issued an order to the following Hence, the instant petition for review on certiorari filed by Far East,
effect: anchored on the following assigned errors:

WHEREFORE, the Court issues this Order: I

1 — Dismissing the complaint against the defendant THE COURT OF APPEALS ERRED WHEN IT
Far East Marble (Phils.) Inc. for lack of cause of DISREGARDED THE FINDINGS OF THE TRIAL
action and on grounds of pre[s]cription: COURT THAT PRESCRIPTION HAS SET IN
OBLIVIOUS OF THE FACT THAT THIS FINDING
2 — Denying for lack of merit the Motion for WAS REACHED AFTER DUE HEARING.
Summary Judgment and the Supplemental Motion
for Summary Judgment; II

3 — Striking off from the records the order of March THE COURT OF APPEALS GRAVELY ERRED IN
6, 1987 and recalling the writ of replevin issued by RULING FOR A REOPENING OF THE TRIAL FOR
this Court, and dismissing all the contempt charges; THE RECEPTION OF EVIDENCE ON BOTH
ISSUES OF PRESCRIPTION AND SUMMARY
4 — Ordering the Sheriff to desist permanently from JUDGMENT WHEN THESE WERE ALREADY
enforcing the writ of seizure and to return all the TRIED AND WEIGHED BY THE TRIAL COURT.
property seized by him under the Writ of Replevin, to
the defendant Far East Marble (Phils.) Inc. III
immediately from receipt of a copy of this order, and
in case of his failure to do so, the value thereof shall THE COURT OF APPEALS ERRED IN ASSUMING
be charged against the replevin bond. (pp. 89- JURISDICTION OVER THE CASE CONSIDERING
90, Rollo.) THAT THE ISSUES RAISED THEREIN INVOLVE
PURE QUESTIONS OF LAW. (p. 14, Rollo.)
The issue of jurisdiction being basis, we shall endeavor to dispose of In the case at bar, BPI alleged in its complaint (Rollo, p. 42) that on
it ahead of the other topics raised by petitioners various dates and for valuable consideration, it extended to Far East
several loans, evidenced by promissory notes, and credit facilities in
Petitioner Far East maintains the position that the Court of Appeals the form of trust receipts, and that despite repeated requests and
stepped beyond the limits of its authority when it assumed demands for payment thereof, Far East had failed and refused to
jurisdiction over the appeal filed by BPI inasmuch as said appeal pay. Thus BPI sought foreclosure of the chattel mortgage securing
raised only the pure questions of law or whether or not the trial court such indebtedness.
erred: (1) in dismissing BPI's complaint for lack of cause of action;
(2) in finding that BPI's cause of action had prescribed; and (3) in In its answer (Rollo, p. 78), Far East admitted the genuineness and
ruling that BPI is not entitled to summary judgment on its causes of due execution of the promissory notes involved in the case,
action against Far East. Consequently, Far East contends, BPI but denied BPI's allegation that repeated demands for payment were
should have taken its case directly to this Court. made by BPI on it. Far East then raised the affirmative defenses of
prescription and lack of cause of action, arguing that since the
There is no dispute with respect to the fact that when an appeal promissory notes matured in 1976 while BPI filed its action to
raises only pure questions of law, it is only this Court which has foreclose the chattel mortgage only in 1987 (or more than 10 years
jurisdiction to entertain the same (Article VIII, Section 5 (2) (e), from the time its cause of action accrued), and there being no
1987 Constitution; Rule 45, Rules of Court; see also Santos, Jr. vs. demand for payment which would interrupt the period of prescription
Court of Appeals, 152 SCRA 378 [1987]). On the other hand, for instituting said action, BPI's claims have prescribed.
appeals involving both questions of law and fact fall within the
exclusive appellate jurisdiction of the Court of Appeals. At this point, BPI, however, countered that its allegation of repeated demands on
there seems to be a need to distinguish a question of law from a Far East for payment sufficiently stated a cause of action; that within
question of fact. ten years from the time its cause of action accrued in 1976, it sent
written extrajudicial demands on Far East requesting payment of its
It has been held in a number of cases (Medina vs. Asistio, Jr., 191 due and outstanding obligations; that within that 10-years period, it
SCRA 218 [1990]; Gan vs. Licup Design Group, Inc., G.R. NO. received written acknowledgments of debt from Far East; and, that
94264, July 24, 1990, En Banc, Minute Resolution; Pilar these demands for payment and acknowledgments of debt
Development Corp. vs. Intermediate Appellate Court, et al., 146 effectively interrupted and renewed the prescriptive period. Worth
SCRA 215 [1986]; Ramos vs. Pepsi-Cola Bottling Co., 19 SCRA 289 noting is the fact that the acknowledgment of debt and the demands
[1967]; Consolidated Mines, Inc. vs. Court of Tax Appeals, et al., 58 for payment, including the affidavits of BPI's counsel who prepared
SCRA 618 [1974]), that there is a "question of law" when there is the demand letter and that of BPI's messenger who allegedly
doubt or difference of opinion as to what the law is on certain state of personally delivered said letters to Far East were duly annexed to
facts and which does not call for an examination of the probative BPI's pleadings.
value of the evidence presented by the parties-litigants. On the other
hand, there is a "question of fact" when the doubt or controversy From the foregoing exchange of pleading, the conflicting allegations
arises as to the truth or falsity of the alleged facts. Simply put, when of fact by the contending parties sprung forth. It is thus quite obvious
there is no dispute as to fact, the question of whether or not the that the controversy centered on, and the doubt arose with respect
conclusion drawn therefrom is correct is a question of law. to, the very existence of previous demands for payment allegedly
made by BPI on petitioner Far East, receipt of which was denied by
the latter. This dispute or controversy inevitably raised a question of
fact. Such being the case, the appeal taken by BPI to the Court of defendant (Tantuico, Jr. vs. Republic of the Phil., et al., 204 SCRA
Appeals was proper. 428 [1991]), while "evidentiary facts" are those which tend to prove
or establish said ultimate facts.
We now come to petitioner's first two assigned errors.
What then are the ultimate facts which BPI had to allege in its
The trial court's finding that BPI's claims due to prescription, can no complaint so as to sufficiently establish its cause of action?
longer prosper, is inextricably connected with, and underpinned by,
its other conclusion that BPI's allegation that it made "repeated Basically, a cause of action consists of three elements, namely: (1)
requests and demands for payment" is not sufficient to state a cause the legal right of the plaintiff; (2) the correlative obligation of the
of action. Moreover, in its questioned Order (Rollo, p. 88) dated June defendant; and (3) the act or omission of the defendant in violation of
1, 1987, the trial court held that: said legal right (Nabus vs. Court of Appeals, et al., 193 SCRA 732
[1991]); Rebollido vs. Court of Appeals et al., 170 SCRA 800 [1989]).
Apart from the fact that the complaint failed to allege These elements are manifest in BPI's complaint, particularly when it
that the period of prescription was interrupted, the was therein alleged that: (1) for valuable consideration, BPI granted
phrase "repeated requests and demands for several loans, evidenced by promissory notes, and extended credit
payment" is vague and incomplete as to establish in facilities in the form of trust receipts to Far East (photocopies of said
the minds of the defendant, or to enable the Court to notes and receipts were duly attached to the Complaint); (2) said
draw a conclusion, that demands or promissory notes and trust receipts had matured; and (3) despite
acknowledgment [of debt] were made that could repeated requests and demands for payment thereof, Far East had
have interrupted the period of prescription. (p. failed and refused to pay.
88, Rollo.).
Clearly then, the general allegation of BPI that "despite repeated
Seemingly, therefore, the trial court believed that the interruption of requests and demands for payment, Far East has failed to pay" is
the prescriptive period to institute an action is an ULTIMATE FACT sufficient to establish BPI's cause of action. Besides, prescription is
which had to be expressly and indispensably pleaded by BPI in its not a cause of action; it is a defense which, having been raised,
complaint, and that failure to so alleged such circumstance is fatal to should, as correctly ruled by the Court of Appeals (DBP vs.
BPI's cause of action. Ozarraga, 15 SCRA 48 [1965]), be supported by competent
evidence. But even as Far East raised the defense of prescription,
We believe and hold otherwise. BPI countered to the effect that the prescriptive period was
interrupted and renewed by written extrajudicial demands for
payment and acknowledgment by Far East of the debt.
Section 3 of Rule 6 state that a "complaint is a concise statement of
the ultimate facts constituting the plaintiff's cause or causes of
action." Further elaborating thereon, Section 1 of Rule 8 declares A complaint is sufficient if it contains sufficient notice of the cause of
that every pleading, including, of course, a complaint, "shall contain action even though the allegation may be vague or indefinite, for in
such case, the recourse of the defendant would be to file a motion
in a methodical and logical form, a plain, concise and direct
for a bill of particulars (Ramos vs. Condez, 20 SCRA 1146 [1967]). It
statement of the ultimate facts . . . omitting the statement of mere
is indeed the better rule that, pleadings, as well as remedial laws,
evidentiary facts." "Ultimate facts" are the essential and substantial
should be liberally construed so that the litigants may have ample
facts which either form the basis of the primary right and duty or
which directly make up the wrongful acts or omissions of the opportunity to prove their respective claims so as to avoid possible
denial of substantial justice due to legal technicalities (Adamo, et al.
vs. Intermediate Appellate Court, et al., 191 SCRA 195 [1990]).

In the case at bar, the circumstances of BPI extending loans and

In fine, the finding of the trial court that prescription has set in is
primarily premised on a misappreciation of the sufficiency of BPI's
allegation as above discussed. The records will show that the
hearing conducted by the trial court was merely pro forma and the
trial judge did not sufficiently address the issue of whether or not a
demand for payment in fact made by BPI and duly received by
herein petitioner Far East.

WHEREFORE, the instant petition is hereby DENIED and the

SO ORDERED.

Feliciano, Bidin, Romero and Vitug, JJ., concur.