HIJOS DE F. ESCANO, INC., PLAINTIFF AND APPELLANT, VS. FELIX NAZARENO, DEFENDANT AND APPELLE

This is an appeal from a decision of the Court of First Instance of Cebu, the dispositive part of which, reads:

“En su consecuencia, el Juzgado absuelve al demandado de la demanda, sin expresa condena de costas.”

This is an action to recover from the defendant-appellee the sum of P10,327.61.

The plaintiff is a corporation duly organized in accordance with
the laws of the Philippine Islands, with its central office in Cebu,
Province of Cebu, and is the successor of the partnership Viuda e Hijos
de F. Escano. All of the assets of said partnership were taken over by
this corporation, among which was the credit sued for in this case.
From July 2, 1917, to December 31, 1922, the defendant had a current
account with the partnership Viuda e Hijos de F. Escano. On December
31, 1922, this current account was closed. The plaintiff claims that
upon that date there was a balance against the defendant of P10,327.61;
that the latter was furnished a statement of this account; that he
admitfed verbally that it was correct and requested that he be allowed
to pay it “little by little”. The defendant denies that he was
furnished with such a statement; that he promised to pay the alleged
balance and contends that his account was fully settled on December 31,
1922.

Assuming the truth of the allegations of the plaintiff, the fact
remains that the alleged agreement of the defendant to pay the
plaintiff the sum of P10,327.61 was not in writing. Furthermore he has
never made any payment on that account since December 31, 1922.

In his amended answer the defendant alleges, as one of his special
defenses: “Que de todos modos, la accion entablada ya ha prescrito.”

The complaint in this case was filed on October 14, 1929, nearly
seven years after the account current of the defendant was closed on
December 31, 1922. In his reply brief the attorney for the
defendant-appellee has called the attention of this court to this
defense. It is true that the judgment of the trial court is based upon
other grounds and that court treated the delay in filing this complaint
as weakening, to a certain extent, the contention of the plaintiff.

The attorney for the plaintiff in commenting upon this defense cites the cases of Marella vs. Agoncillo’ (44 Phil., 844) and F. M. Yap Tico & Co. vs. Lopez Vito (49 Phil., 61). In the first case this court held:

“CURRENT ACCOUNT; DATE OF ACCRUAL.—Where business
relations existed between plaintiff and defendant, and their dealings
were entered in a current account, the action to demand payment of the
balance accrues only on the date when the last balance is struck, and
not when those business relations terminate, for it is only on the date
the last balance is struck that the final balance is known.

“Therefore, applying the rules of prescription provided by the Civil
Code, we have that the plaintiffs’ action to demand the payment of the
P10,032.42 by Felisa Arriola accrued on July 24, 1899; and on July 18,
1913, when the original complaint was filed by the plaintiffs, the
fifteen years, fixed by article 1964 of the Civil Code for the
prescription of personal actions having no special period of
prescription, had not elapsed, and much less had it elapsed in May of
the same year, when they presented their claim to the committee on
appraisal in the proceedings for the settlement of the estate of the
deceased; and therefore the lower court also erred in holding said
action to have prescribed under the provisions of the Civil Code.”
(Page 854.)

In the Yap Tico case this court held:

“RULE OF CONSTRUCTION AS TO OPEN, MUTUAL, AND
CURBENT ACCOUNTS.—’Where there is a mutual, open, and current account
consisting of reciprocal demands, the general rule is that the cause of
action to recover the balance is deemed to accrue at the date of the
last item proved, and that the statute of limitations runs from that
time, so that, if the last item on either side of the account is not
barred, it “draws to itself all the other items” which will become
barred only when the statute has run against the last no matter how far
back the account commenced. * * *’ (Corpus Juris, volume 37, page 865.)”

In that case the complaint was based upon chits signed by the
defendant, the last of which was dated July 30, 1918. The complaint was
filed on March 26, 1925, well within the ten-year prescriptive period
provided by section 43 of the Code of Civil Procedure for bringing
action upon a written agreement.

In the case under consideration the judgment is in favor of the
defendant-appellee. This court held in the case of Garcia Valdez vs. Soterana Tuason (40 Phil., 943, 951), that:

“* * * It is not incumbent on an appellee, who
occupies a purely defensive position and is seeking no affirmative
relief, to make assignments of error. Only an appellant is required to
make such assignments. Therefore, when the case occurs, as not
infrequently happens, that a trial judge decides a case in favor of one
of the parties on a certain ground, it is entirely proper for this
court, upon affirming the judgment, to base its decision upon some
other point which may have been ignored by the trial court or in
respect to which that court may have been entirely in error.”

Section 43 of the Code of Civil Procedure provides that civil
actions other than for the recovery of real property can only be
brought within the following periods after the right of action accrues:
“2. Within six years: An action upon a contract not in writing, whether
such contract is expressed or implied * * *.”

There is no evidence to show that the current account agreement in
question was ever reduced to writing. The defendant-appellee did not
agree in writing to pay the plaintiff-appellant the sum of P10,327.61.
The plaintiff’s action to demand payment accrued on December 31, 1922.
The complaint, as stated above, was filed on October 14, 1929. The
plaintiff’s right of action had prescribed before this suit was brought
against the defendant-appellee.

This conclusion renders it unnecessary to discuss the appellant’s seventeen assignments of error.

The judgment of the trial court is affirmed with costs in this instance against the plaintiff-appellant. So ordered.

Malcolm, Villa-Real, Hull, and Imperial, JJ., concur.