Republic of the PhilippinesSUPREME COURTManila

EN BANC
G.R. No. L-17467 April 23, 1963
NATIONAL DEELOPMENT COMPAN!, r"pr"#"$%"& '( i%# A)"$%#, T*E P*ILIPPINE
NATIONAL +AN,, plaintiff-appellant, vs.-OSE !ULO TO+IAS, defendant-appellee.
Ramon de los Reyes for plaintiff-appellant.Vicente Hilado for defendant-appellee.
CONCEPCION, J.:
Appeal taken by plaintiff, National Developent Copany, !ep!esented by its a"ent, #he
Philippine National Bank, f!o an o!de! of the Cou!t of $i!st %nstance of Ne"!os &ccidental
disissin" plaintiff's coplaint upon the "!ound of p!esc!iption of action, (ithout special
p!onounceent as to costs.
%n said coplaint, filed on Ma!ch )), *+,-, plaintiff seeks to !ecove! f!o defendant, .ose
/01& #&B%A2, the su of P,,+-3.4*, plus inte!est and atto!ney's fees, unde! a p!oisso!y
note of said defendant, dated and issued on May *5, *+6,, fo! the su of P7,---.--, payable
8on deand afte! date8 to the o!de! of said plaintiff. 0pon bein" suoned, the defendant
filed a otion to disiss upon the "!ound that 8the action upon (hich the coplaint is based
has p!esc!ibed lon" a"o,8 o!e than ten 9*-: yea!s havin" elapsed since May *5, *+6,, (hen
said p!oisso!y note (as issued and plaintiff's action acc!ued. ;ence, the afo!eentioned
o!de! of disissal, (hich plaintiff assails as e!!oneous upon the theo!y that the statute of
liitations does not !un a"ainst the plaintiff because the sae is an inst!uentality of the
<ove!nent. %n suppo!t of this vie( plaintiff cites the case of the Government of the
Philippine Islands vs. Monte de Piedad 953 Phil. 754:.
Plaintiffs p!etense is clea!ly devoid of e!it. #he case cited is not in point, it havin" been
instituted by the <ove!nent of the Philippine %slands. Plaintiff he!ein is neithe! the
<ove!nent of the Republic no! a b!anch o! subdivision the!eof. %t is t!ue that plaintiff is an
inst!uentality of such <ove!nent, but as this Cou!t has held in the case of Association
Cooperative de Credito Agricola de Miagao vs. Monteclaro 976 Phil. )4*:, 8even the
A"!icultu!al and %ndust!ial Bank, (hich is a "ove!nent o(ned and cont!olled co!po!ation and
(hich has been c!eated to p!oote a"!icultu!e and indust!y on a la!"e! scale than a"!icultu!e
c!edit coope!ative associations, cannot be said to eercise a sovereign f!nction. %t is, like all
othe! co!po!ation capitali=ed by the <ove!nent, a b!siness corporation,8 and, as such, its
causes of action a!e sub>ect to the statute of liitations. #o the sae effect a!e the cases of
Monteadora vs. Ceb! Portland Cement Co. 936 &.<. 6)4+:, Price "tabili#ation Corp. vs. CIR
936 &.<. 667):, G"I" vs. Castillo 93) &.<. 6),+:, and Manila Hotel $mployees Association
vs. Manila Hotel Co. 975 Phil. 576:.
?he!efo!e, the pa!ties !espectfully p!ay that the fo!e"oin" stipulation of facts be aditted and
app!oved by this ;ono!able Cou!t, (ithout p!e>udice to the pa!ties adducin" othe! evidence to
p!ove thei! case not cove!ed by this stipulation of facts. %&'ph(%.)*t
#hat plaintiff he!ein does not e@e!cise sove!ei"n po(e!s A and, hence, can not invoke the
e@eptions the!eof A but is an a"ency fo! the pe!fo!ance of pu!ely co!po!ate, p!op!ieta!y o!
business functions, is appa!ent f!o its &!"anic Act 9Coon(ealth Act *4), as aended by
Coon(ealth Act 5**: pu!suant to section 5 of (hich it 8shall be sub>ect to the p!ovisions of
the Co!po!ation 1a( in so fa! as they a!e not inconsistent8 (ith the p!ovisions of said
Coon(ealth Act 8and shall have the "ene!al po(e!s entioned in said8 Co!po!ation 1a(,
and, hence, 8ay en"a"e in coe!cial, indust!ial, inin", a"!icultu!al, and othe! ente!p!ises
(hich ay be necessa!y o! cont!ibuto!y to the econoic developent of the count!y, o!
ipo!tant in the public inte!est,8 as (ell as 8acBui!e, hold, o!t"a"e, and alienate pe!sonal
and !eal p!ope!ty in the Philippines o! else(he!e . . .C ake cont!acts of any kind and
desc!iption8 and 8pe!fo! any and all acts (hich a co!po!ation o! natu!al pe!son is autho!i=ed
to pe!fo! unde! the la(s no( e@istin" o! (hich ay be enacted he!eafte!.8
%n fact, plaintiff (as sentenced to pay costs in +atongbacal v. ,ational -evelopment Co. 96+
&.<. ))+:, and ,ational -evelopment Co. vs. CIR. /-%0123 92eptebe! 5-, *+3+:, despite
the fact that 8no costs shall be allo(ed a"ainst the Republic of the Philippines, unless
othe!(ise p!ovided by 1a(,8 pu!suant to Rule *5*, 2ection *, of the Rules of Cou!t.
?;ERE$&RE, the o!de! appealed f!o is he!eby affi!ed, (ith the costs of this instance
a"ainst plaintiff-appellant.
+eng#on. C.4.. Padilla. +a!tista Angelo. Reyes. 4.+./.. +arrera. Paredes. -i#on. Regala and
Ma5alintal. 44.. conc!r./abrador. 4.. too5 no part.