PHILIPPINE NATIONAL BANK, PLAINTIFF AND APPELLANT, VS. FRANCISCO BUENASEDA, DEFENDANT AND APPELLEE.

Taking into consideration the stipulation of facts submitted by the
plaintiff, Philippine National Bank, and defendant Francisco Buenaseda (in Civil
Case No. 32496, CFI of Manila), to wit:

“1. That plaintiff has obtained a judgment for a sum of money in its favor
against the Philippine Lumber Distributing Agency, Inc., in Civil Case No. 7807,
entitled ‘Philippine National Bank versus Philippine Lumber Distributing Agency,
Inc.’ of the Court of First Instance of Manila, Branch I, which remains
unsatisfied up to now, and said plaintiff is authorised by said Branch I in said
Civil Case to institute this instant action against the defendant;

“2. That defendant purchased from the Philippine Lumber Distributing Agency,
Inc. lumber materials in various independent transactions in 1947, amounting to
a total of P15,594.00 and payments on said lumber purchase were made by
defendant in the total amount of P11,568.35, the last of which payment was on
July 13, 1949, leaving an unpaid balance of P4,025.85 in favor of the Philippine
Lumber Distributing Agency, Inc.;

“3. That the said series of transactions in 1947 between defendant and the
Philippine Lumber Distributing Agency, Inc. were made through 21 sates orders
and others by verbal orders, and upon said orders, 69 delivery receipts were
issued to defendant representing receipts of lumber by him, which sales orders
and delivery receipts will be submitted by the parties in the hearing of this
case as Exhibits A, A-1 to A-89;

“The parties further stipulate that with the foregoing facts, the only issues
involved in this case are:

‘a. Whether the transactions between defendant and the Philippine Lumber
Distributing Agency, Inc. partake the nature of oral or written contracts, based
on said verbal orders, sales orders and delivey receipts (Exhibits A, A-1 to
A-89; and

‘b. “Whether the action of plaintiff based on said verbal orders, sales
orders and delivery receipts, has prescribed.'”,

and finding that the 21 sales orders and 69 delivery receipts, upon which the
action was based, not in themselves contracts in writing, the court ruled that
the filing of the complaint on May 7, 1957 was made beyond the prescriptive
6-year period allowed by law for actions on oral contracts. From this decision,
the Philippine National Bank brought the case on appeal to the Court of Appeals
which elevated the same to this Court, the issues raised therein being purely
legal.

The question to be determined in this instance is whether plaintiff’s action,
instituted in 1957 and involving transactions entered into in 1947, the last
payment on which was in 1949, is already barred by the statute of limitations.
The resolution of such question, in turn, depends on whether the aforementioned
transaction, evidenced by the herein delivery receipts and sales orders, were
based on written contracts.

The lower court, in holding that the printed, as well as the handwritten,
sales orders and delivery receipts exhibited as part of the stipulation of
facts, do not constitute written agreement, said:

“An examination of the various sales orders and delivery receipts (Exhibits
A, A-1 to A-89) shows that they do not contain any agreement of the parties to
the transaction, wherein the defendant promised or obligated himself to pay a
sum certain in money, because, as a matter of fact majority of said instruments
do not contain specific amounts, and those with amounts do not even specify an
obligation or a promise to pay said amounts on a day certain.

‘The broad and comprehensive language of the statute of limitations providing
that an action upon a writing for the payment of money can be commenced only
within a prescribed period after the cause of action shall have accrued embraces
all kinds of written instruments, without regard to their form or phraseology,
which imply a promise or agreement to pay money. As otherwise expressed, to come
within the statute, it must appear that the money sued is promised to be paid by
the language of the writing sued upon (34 Am. Jur., p. 71, Sec. 85); and if the
promise arises only upon proof of extrinsic facts, or if the agreement may be
proved only by evidence aliunde, or if the liability sought to be enforced is
imported into an agreement from some external source, or if the agreement is
partly oral and partly written, the writing is not within the purview of the
statute. (34 Am. Jur., pp. 76-77, Sec. 92).”

That these are transactions for which appellee is liable is not herein issue.
As a matter of fact, appellee admits the existence and validity of the
obligation. The question actually raised in this appeal is whether the action
for the enforcement of this obligation, brought on May 7, 1957, or more than 7
years after the last payment on the indebtedness was made, is already barred by
the statute of limitations.

Under Act 190, the law applicable to the instant case, an action based upon a
written contract prescribes in 10 years,^[1] whereas one predicated on a contract not in
writing must be commenced in 6 years.^[2]

It is the contention of appellant that the 21 sales orders and 69 delivery
receipts issued in connection with the lumber purchased and received by appellee
constitute written contracts. Appellee, naturally, maintains the contrary
view.

A “writing” for the payment of money sued in an action, within the meaning of
the ten-year statute of limitations, is one which contains either an express
promise to pay or language from which a promise to pay arises by fair
implication.^[3] It is sufficient if the
words import a promise or an agreement or if this can be inferred from the terms
employed.^[4] Evidently, while it is hot
necessary that there be an express promise, the writing, to be within the
statute, must on its face contain words or language which would fairly imply
such a promise to pay. In other words, it must affirmatively appear that the
promise of payment was given by the language of the writing itself. If, as
stated in the authorities cited by the trial court, the promise arises only upon
proof of extrinsic facts, or as sometimes expressed, upon evidence
aliunde, the writing is not within the purview of the statute. Stated
differently, where the promise or agreement to pay on which the action is based
does not appear in express terms or by fair implication in writing, but the
cause of action arises out of facts collateral to the instrument, it does not
fall within the provision of the statute of limitations.^[5] Of course, if the writing upon which the action
is based is sufficient to set up a promise or agreement, then the statute
applies even though parol evidence is necessary to show a breach of such
agreement or the happening of contingencies which would render defendant liable
under the agreement.^[6]

For the purpose of determining whether the documents upon which the present
action is based comply with the strictures of these authorities, we examined the
exhibits one by one and found the following:

Of the 69 duly acknowledged delivery receipts, five^[7] contain no prices nor term of the transaction.
They merely specify the name and address of the person to whom delivery was
made, the date of such delivery, and the quantity and kind of lumber delivered.
The only words that would indicate to some degree the nature of the transaction
are the following, printed at the bottom of the document:

“We certify that the kind or kinds of timber or lumber listed on this invoice
are exactly the same as those sold or delivered, or to be delivered to the
purchaser.

Received above in good order and condition

Francisco U. Buenaseda

By:

(Sgd.) A. Legaspi”

There is nothing in the above language used in the receipts which would
indicate any promise to pay, how much to pay and when and how to pay for the
lumber thus received. Clearly, standing alone, these delivery receipts could not
be the writing referred to in the statute of limitations upon which an action
can be based.

Sixty-three^[8] of the delivery receipts
are in the same tenor, except that they contain the prices of the lumber
delivered, but like the previous ones, they do not indicate the term of the
transactions or the manner by which payment would be made, nor contain a promise
by the receiver to pay at all the goods at any time. These receipts do not also
correspond to the agreement in writing contemplated in the statute of
limitations.

Of the eighteen printed sales orders, seventeen^[9] are without prices, although in the space for
terms, which probably refers to the manner of payment of the purchased goods,
there appears the word “credit”. Two of the three Bales orders in appellee’s own
handwriting,^[10] asking for delivery of
certain kinds of lumber, while directing them to be “charge (d) to my account as
usual”, do not contain the prices or value thereof. These, again, do not
constitute suable contract in writing within the statute as they do not imply
complete agreement. The amount to be paid and the manner of payment do not
appear in the writing but must be supplied by oral proof. And, it has been held
that where the agreement is partly oral and partly written, the writing is not
within the purview of the statute.^[11]

The only delivery receipt found to be supported by a sales order is Exhibit
A-84, evidencing delivery of lumber worth P446.45. It was issued pursuant to
sales order No. 736 (Exh. A-86) which, in turn, was made upon receipt of
appellee’s handwritten order for goods (Exh. A-85), and with instruction to
charge the same to his account.

This single transaction evidenced by these three exhibits is the nearest to
an agreement in writing within the contemplation of the statute. Nevertheless,
inasmuch as the terms of payment of the amount of P446.45 do not appear in any
or all of the three exhibits combined, the agreement is not complete and an
indispensable aspect must be supplied by evidence aliunde. Hence, the
agreement is thereby partly oral and partly written. The term “charge to my
account as usual” makes the obligation thus assumed indefinite and uncertain and
liable to be affected by other possible agreements, such as discount in favor of
the-purchaser (appellee), or some conditions, precedent or subsequent, or any
number of contingencies affecting not only the relationship between the parties
but also the nature and extent of the obligation itself and the liability of
each of them.

In view of the foregoing, the decision of the lower court appealed from is
hereby affirmed, with costs against the appellant. So ordered.

Bengzon, C. J., Padilla, Bautista Angelo, Concepcion, Reyes, J. B. L.,
Paredes, Dizon, and De Leon, JJ., concur.

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^[1] Sec. 43, 1st par., now Art. 1144, New
Civil Code.

^[2] Sec. 43, 2nd par., now Art. 1145,
New Civil Code.

^[3] 111 A.L.R. 984, and cases therein
cited.

^[4] Ibid.

^[5] Curtis vs. Sexton (1907) 201 Mo.
217, 100 S.W. 17, quoted in Quint vs. Kingsbury (1927; Mo. App.) 289 S.W.
667.

^[6] Quint vs. Kingsbury,
supra.

^[7] Exhs. A-5, A-6, A-7, A-8, and
A-18.

^[8] Exhs. A, A-1, A-2, A-9, A-10, A-11,
A-12, A-13, A-14, A-15, A-17, A-19, A-20, A-21, A-22, A-23, A-24, A-25, A-26,
A-27, A-86, A-37, A-38, A-39, A-40, A-41, A-42, A-43, A-44, A-45, A-46, A-47,
A-60, A-51, A-S3, A-54, A-55, A-56, A-57, A-58, A-59, A-60, A-61, A-62, A-63,
A-64, A-66, A-67, A-68, A-69, A-70, A-71, A-72, A-73, A-74, A-75, A-76, A-77,
A-79, A-80, A-82, A-83, and A-37.

^[9] Exhs. A-3, A-4, A-16, A-28, A-29,
A-30, A-31, A-33, A-34, A-85, A-47, A-48, A-52, A-65, A-78, A-81, and A-89.

^[10] Exhs. A-32 and A-88.

^[11] 34 Am. Jur., p. 77, Sec. 92, and
cases cited therein.