De Guzman v CA (Civil Procedure)

Digest # 1


[G.R. Nos. 92029-30 : December 20, 1990.] 192 SCRA 507
NICANOR G. DE GUZMAN, JR., Petitioner, vs. HON. COURT OF APPEALS, Former Fifth Division, HON. REGIONAL TRIAL COURT, National Capital Judicial Region, Br. 48, Manila, and ENRIQUE KP. TAN, Respondents.

D EC I S I O N 
GANCAYCO, J.:

Plaintiff De Guzman and defendant Tan have been friends and in the course of this relationship, they have exchanged mutual favors and accommodations, including discounting of check for cash.
More than seven (7) years ago, several checks were issued by De Guzman to Tan in exchange for cash which probably amounted to P280,900.00. In due time, these checks were either fully paid, settled, extinguished or condoned by agreement of the parties, and for which reason, Tan did not anymore redeem the checks precisely because they have been close and mutual friends.
Lately, however, De Guzman received from Tan's lawyer a demand letter dated 1988 supposedly detailing out therein the former's obligation to the latter. Principal Amount — P280,900.00 (Value of 66 dishonored checks) Legal Interest at — 235,956.00 1% per Month (For 84 months or 7 years) Attorney's Collection — 51,685.00 Fee (At 10% Only) TOTAL Amount Due — P568,541.00.
Hence, De Guzman filed a complaint for damages and other equitable reliefs in the trial court.
De Guzman prays for relief by way of actual, exemplary and nominal damages, and also prays that the private respondent be ordered to return to petitioner the checks mentioned in the complaint, and to pay the costs.
On October 8, 1988, Tan filed a motion to dismiss the complaint for lack of cause of action and prescription.

DECISION OF LOWER COURTS:
*RTC-Manila: dismissed the complaint for failure to state a cause of action. *RTC-Manila (MR): denied.
*CA (petition for Certiorari and mandamus): dismissed the appeal.

ISSUE:
Is there a cause of action?

HELD: YES.

in said letter threat of court action was made causing injury to De Guzman; that Tan illegally withheld the petitioner's checks which should be returned to petitioner; that for Tan's act of demanding payment for an obligation not due and for the former's failure to act with justice, observe honesty and good faith, De Guzman prays for relief by way of actual, exemplary and nominal damages, and also prays that the private respondent be ordered to return to petitioner the checks mentioned in the complaint, and to pay the costs.
Contrary to the findings of the lower court and the appellate court that the complaint states no cause of action, this Court finds and so holds that it states a sufficient cause of action.

IMPORTANT
It must be remembered that when a party files a motion to dismiss the complaint for lack of cause of action he is deemed to hypothetically admit the allegations thereof.
From the allegation of the complaint in this case it appears that,
(1) De Guzman has a primary right, because of having paid his obligation to Tan, to have the checks he issued to cover the amount returned to him or otherwise cancelled by private respondent; and
(2) the primary right of was violated when private respondent demanded payment of a settled obligation relying on the very checks of De Guzman he had not returned. Consequently, on account of such demand for payment for an obligation duly settled, De Guzman thereby suffered damages and should be afforded such relief as prayed for in the complaint.
Contrary to the observation made by the appellate court, the cause of action had not prescribed. The cause of action accrued only on August 20, 1988 when in a demand letter for payment private respondent thereby committed a wrongful act against petitioner.
The complaint was filed promptly on September 15, 1988, well within the four (4) year prescriptive period of an action of this nature.

NOTES:
A cause of action is the fact or combination of facts which affords a party a right to judicial interference in his behalf.
An action means an ordinary suit in a court of justice, by which one party prosecutes another for the enforcement or protection of a right, or the prosecution or redress of a wrong.
The cause of action must always consist of two elements:
(1) the plaintiff's primary right and the defendant's corresponding primary duty, whatever may be the subject to which they relate — person, character, property or contract; and
(2) the delict or wrongful act or omission of the defendant, by which the primary right and duty have been violated.
The cause of action is determined not by the prayer of the complaint but by the facts alleged. 


Digest # 2

Nicanor De Guzman v. CA, Enrique Tan

Pronouncements:

·       Cause of action – the fact or combination of facts which affords a party a right to judicial interference;

·       2 elements of cause of action:

(1)  The plaintiff’s primary right and the defendant’s correlative primary duty, whatever may be the subject to which they relate – persons, character, property or contract; and

(2)  The delict or wrongful act or omission of defendant, by which the primary right and duty have been violated;

·       Right of action – the right to commence and maintain an action

Compared with cause of action: it is a remedial right while the ‘cause of action’ is an operative fact that gives rise to such remedial right;

Facts:

·       Petitioner filed “damages with equitable relief” in RTC:

-       Petitioner and respondent are mutual friends and have exchanged mutual favors and accommodations, including discounting of checks for cash

-       More than 7 years ago, several checks were issued by petitioner in exchange for cash amounting to (P290,000.00) but these checks were either:

-       (a) fully paid; (b) settled; (c) extinguished; or (d) condoned.

-       Respondent, all of a sudden, made a demand letter thru his counsel demanding the total of the checks with interests for an amount of P568,541.00

Lower court rulings:

·       RTC: dismissed, no cause of action

·       CA: dismissed the appeal

·       Certiorari to the SC

Issue: WON there is a sufficient cause of action.

Ruling: Yes. There is a cause of action.

Test of sufficiency of cause of action was complied:

(1)  Primary right of petitioner: having paid his obligations to private respondent, he has a right to have the checks returned to him or otherwise cancelled by respondent (correlative primary duty);

(2)  Primary right was violated (delict/wrongful act): private respondent demanded the very checks of petitioners he had not returned which were already paid by the latter

Has action prescribed?

No, the cause of action accrued only on August 20, 1988 when the payment was demanded by respondent, well within the 4 year prescriptive period for an action of this nature.