China Banking Corporation v. Hon. Court of Appeals

Summary

Banking collection case where China Banking Corporation argued that AFPSLAI's action to collect on Home Notes was barred by prescription, claiming cause of action accrued from maturity date in 1983. Supreme Court rejected this, establishing that for written contracts, cause of action accrues not from maturity date but when obligor refuses demand for payment. Since AFPSLAI's demand was made July 20, 1995 and refused, with suit filed September 24, 1996, the action was within the 10-year prescriptive period under Article 1144 of Civil Code. The decision clarifies the three essential elements of cause of action and emphasizes that breach occurs only upon refusal to pay after demand, not upon mere maturity of obligation. This ruling is significant for debt collection cases involving promissory notes and similar instruments where payment requires presentation and demand.