CONVETS, INC., PLAINTIFF AND APPELLANT, VS. NATIONAL DEVELOPMENT COMPANY, ET AL., DEFENDANTS AND APPELLEES.

On September 13, 1955, the Confederation of Filipino Veterans (hereinafter
referred to as the CONVETS), a domestic corporation, filed a complaint in the
Court of First Instance of Manila against the National Development Company
(hereinafter called the NDC), the Land Settlement and Development Corporation
(hereinafter called the LASEDECO), and the Board of Liquidators created by
Republic Act No. 1160 for the recovery of the sum of P36,000 as sgent’s
commission on the sale of certain commodities.

For cause of action, the complaint, as later amended, alleges that on July 7,
1949 a committee of the NDC in a memorandum submitted to the latter’s general
manager (attached to the complaint as annex A) recommended that plaintiff be
allowed a 10% straight commission on sales of items from the Caledonia Pile (a
mass of surplus goods which the NDC had in its compound in Manila) where
plaintiff had a direct hand in the sale; that in line with said recommendation,
the NDC, as per resolution of its Board of Directors on July 13, 1949, accepted
CONVETS’ firm offer “to act as the exclusive sales agent for the sale of all
items whether inventoried or uninventoried, classified or not, segregated or
otherwise, of the Caledonia Pile,” under the terms and conditions embodied in
the minutes of the Board’s meeting, an excerpt of which was attached to the
complaint as annex B; that on September 28, 1949, plaintiff informed the NDC
Board that it had found a buyer, the firm of Joseph Behr & Sons, Inc., of
1100 Seminary St., Rockford, Illinois, U.S.A., which had sent authorized
representatives to Manila to deal with the NDC; that on November 25, 1949,
through the direct intervention of plaintiff in its capacity as sole agent of
the defendant NDC, a contract of sale of about 4,000 tons of spare parts in the
Caledonia Pile at P90 per ton between the NDC and Joseph Behr & Sons, Inc.,
was approved by the NDC’s Board of Directors in its resolution of that date
attached to the complaint as annex C, the deeds pertaining thereto being also
attached to the complaint as annexes D and E; that in confirmation of previous
commitments, promises and past business dealings between plaintiff and the NDC,
a written agency agreement was entered into between them on February 8, 1950,
with retroactive effect from July 13, 1949, copy of the agreement being attached
to the complaint as annex F; that the aforementioned sale of spare parts to
Joseph Behr & Sons, Inc., has already been executed with the latter paying
the NDC the sum of $45 or P90 for every long ton of said spare parts taken from
the Caledonia Pile by establishing, as stipulated in the contract, “an
irrevocable Letter of Credit in the total amount of $150,000” in a Manila bank;
that upon the promulgation of Executive Order No. 355 on October 23, 1950, the
management and disposition of the Caledonia Pile were transferred from the NDC
to the LASADECO and that upon the latter being dissolved by Republic Act No.
1160 its assets were turned over to the Board of Liquidators created by said
Act, plaintiff being, for that reason, uncertain from which one of the
defendants it is entitled to get relief; and that notwithstanding repeated
demands, the defendants have failed and refused to pay plaintiff its commission
on the sale mentioned.

Instead of answering the complaint, the defendants filed a motion to dismiss
on the grounds that the complaint did not state a cause of action and that
plaintiff’s action, if it had any, had already prescribed.

Upholding both grounds, the lower court granted the motion to dismiss. Hence,
this appeal.

We find the appeal meritorious.

In holding that plaintiff’s complaint did not state a cause cf action against
the defendant NDC, the lower court took into account the documents attached to
the complaint as annexes A to F, and inferred therefrom that the sale in
question was neither initiated nor consummated by plaintiff but was a direct
transaction between the management of the NDC and Joseph Behr & Sons, Inc. ,
and that said sale was not according to the conditions set forth in the
aforementioned annexes in that It was not a “lot sale,” at “formula price,” and
“to the general public.” But it is elementary that lack of cause of action as
ground for dismissal must appear, on the face of the complaint and that to
determine the sufficiency of the cause of action, only the facts alleged in the
complaint, and no other, should be considered. (Moran’s Rules of Court, Vol. I,
1957 ed., p. 140.) In the present case, the complaint, as amended, alleges in
effect that plaintiff was appointed by the defendant NDC its exclusive agent to
sell “all items * * *of the Caledonia Pile” on a 10% straight commission; that
some time thereafter, plaintiff informed the said defendant that it had found a
buyer in the United States with authorized representatives in Manila to deal with
said defendant, the buyer being the firm of Joseph Behr & Sons, Inc. of 1100
Seminary St., Rockford, Illinois; that “thru the direct intervention of the
plaintiff, acting in its capacity as (such) sole agent”, a contract of sale of
certain items from the Caledonia Pile at a specified price, was finally approved
by said defendant’s Board of Directors and thereafter the sale was executed with
the buyer paying the seller the stipulated price by means of an irrevocable
letter of credit; and that notwithstanding the consummation of the sale, the
defendants have failed and refused to pay the stipulated commission
notwithstanding repeated demands. These allegations, the truth of which is
hypothetically admitted by defendants’ motion to dismiss, do constitute a cause
of action for the recovery of the stipulated commission; and while the annexes
to the complaint do also mention certain terms under which the sales of
merchandise from the Caledonia Pile should be made, there is really nothing in
said annexes that contradicts or nullifies the ultimate facts alleged in the
complaint or proves by itself alone that the terms prescribed were not complied
with to the satisfaction of the principal. Any such non-compliance is a matter
of defense, which should be alleged in the answer and proved at the trial. As
was said by this Court in the case of World Wide Insurance & Surety Co.,
Inc. vs. Manuel et al. (51 Off. Gaz. 6214).

“* * * To determine whether a complaint states a cause of action one must
accept its allegations as true. One may not go beyond and outside the complaint
for data or facts, especially contrary to the allegations of the complaint, to
determine whether there is cause of action. Of course, there are cases where
there may be a conflict or contradiction between the allegations of a complaint
and a document or exhibit attached to and made part of it. In that case, instead
of dismissing the complaint, defendant should be made to answer the same so as
to establish an issue and then the parties will be given an opportunity, the
plaintiff to reconcile any apparent conflict between the allegations in his
complaint and a document attached to support the same, and the defendant an
equal opportunity to refute the allegations of the complaint and to show that
the conflict between its allegation and the document attached to it is real,
material and decisive.”

The court below also ruled that the complaint states no cause of action
against the defendants LASEDECO and Board of Liquidators on the theory that the
articles sold to Joseph Behr & Sons, Inc., no longer formed part of the when
its management and disposition were transferred from the NDC to the LASEDECO and
that consequently they were also not among the assets of the LASEDECO that were
turned over to the Board of Liquidators. The ruling is erroneous, for it is
apparent that these two defendants have been made parties to the action for
having succeeded to the management of the Caledonia Pile and to the obligations
incurred in connection with its disposal.

Finally, the lower court also erred in declaring that plaintiff’s cause of
action had already prescribed when the complaint was filed on September 13,
1955. Plaintiff’s claim is founded upon a. written contract of agency, which
allows it a. 10% commission on sales negotiated by it, the commission to be
payable within the first five days of the month succeeding the sale. As the sale
was consummated in December, 1949, plaintiff’s right of action for the recovery
of the commission accrued on January 5, 1950. From that date, plaintiff had ten
years to bring his action in court since the action is based upon a written
contract (art. 1144, new Civil Code). It is thus clear that when the complaint
was filed in 1955, plaintiff’s right of action had not yet prescribed. In any
event, this Court has already held that where it is not clear from the
allegations of the complaint just when plaintiff’s cause of action accrued, and
consequently it cannot be determined with certainty whether that action has
already prescribed or not, the defense of prescription cannot be sustained on a
mere motion to dismiss based on what appears on the face of the complaint.
(Sison. vs. McQuaid, 94 Phil., 201, 50 Off. Gaz., 96.)

In view of the foregoing, the order complained of is set aside and the case
remanded to the court below for further proceedings. No costs.

Paras, C.J., Bengzon, Padilla, Bautista Angelo, Concepcion, Reyes, J.B.L., Endencia, and Felix, JJ., concur.