Central Philippine University vs CA RULING:

YES.
FACTS:
A deed of donation involving a parcel of land was executed by Don Ramon Sr., member
of the board, in favor of CPU conditioned that:
1) The land shall be for the exclusive use of CPU and a medical college shall be
established
2) Land shall be called RAMON LOPEZ CAMPUS and they shall erect
cornerstones bearing that name;
3) The net income from the land shall be put in the RAMON LOPEZ CAMPUS
FUND.
After fifty years, no medical college building was established.
A donation may be revoked for non-fulfillment or non-compliance of the conditions
set forth.
When a person donates land to another on the condition that the latter would build
upon the land a school, the condition imposed was not a condition precedent or a
suspensive condition but a resolutory one. It is not correct to say that the schoolhouse
had to be constructed before the donation became effective, that is, before the donee
could become the owner of the land, otherwise, it would be invading the property rights
of the donor. The donation had to be valid before the fulfillment of the condition. If
there was no fulfillment or compliance with the condition, such as what obtains in the
instant case, the donation may now be revoked and all rights which the done may have
acquired under it shall be deemed lost and extinguished.

ISSUE: It has been fifty years, unfortunately, CPU still failed to comply with its obligation. It is
Whether or not the donation is revocable because of the alleged resolutory breach. but just and equitable now to revoke CPU as done and should return the donated
property to the heirs of the donor.

OTHER PRINCIPLES:
A donation is considered onerous when executed for a valuable consideration which
is considered the equivalent of the donation.

In the case at bar, the donation of the land was subject to a condition to establish a
medical college therein, thus, the donation must be for an onerous consideration.

In case of gratuitous donation, doubts should be resolved in favor of the least

transmission of rights.
 Dolar vs Brgy. Lublub et al.
FACTS:
Petitioner and Serafin Jaranilla were co-owners of a parcel of land with an area of 4.6
hectares, identified as Lot No. 1, Pcs-06-000744 (Lot No. 1, for brevity), situated in Brgy.
Lublub, Municipality of Dumangas, Iloilo. Said property forms part of Lots No. 4181 and
4183 of the Dumangas Cadastre, On September 16, 1981, petitioner and Jaranilla
donated Lot No. 1 to respondent Barangay Lublub, subject to the following conditions:
prescription under Article 764, 11 in relation to Articles 733 12 and 1144 (1) 13 of the
Civil Code, granted the Barangay's motion to dismiss in Civil Case No. 98-033 and denied
petitioner's similar motion in Civil Case No. 00-140. The action to revoke donation was
to have been led within ten (10) years from the time the action accrued, i.e., from the
time of the non-compliance of the conditions.
ISSUES:

(A) That the area donated shall be for the purpose of con[s]tructing building 1) Whether or not the acceptance of the donation is defective making it invalid.
and/or establishing public plaza, sports complex, public market, health centers 2) Whether or not the deed of donation in question is no longer eective by
and the like for the use of the Barangay of Lublub . . . which area shall be reason of the automatic reversion clause therein.
hereinafter be known as DON VENANCIO DOLAR PLAZA and shall be so 3) Whether or not the action to quiet title has prescribed.
designated in a proper landmark; 4) Whether or not the donation was invalid because it was not registered in the
(B) That the construction and development of the area above-described shall be Registry of Property
initiated and completed within ve (5) years from the execution of this Deed
of Donation and should the same be not made or completed then this Deed of
Donation shall have no force and eect whatsoever and the ownership of the
above-described property will revert back to the DONORS including all or any
unnished improvement the DONEE might have placed or constructed.
(C) That . . . should the use of the area be converted to uses other thanherein
stipulated, then this DEED OF DONATION shall be deemed revoked and the
ownership shall revert back to the DONORS . . . (Underscoring added).

Then barangay captain Jose Militar accepted the donation in behalf of Brgy. Lublub.
Respondent barangay however failed to have the donation registered under its name
while petitioner acquired TCT covering the donated area. Sometime in June 1989,
petitioner executed another deed donating to Brgy.Lublub, represented by its
incumbent barangay captain, the very same area he and Serafin Jaranilla had earlier
donated to the same donee. The second deed of donation contained exactly the same
conditions expressly set forth in the first. On May 6, 1998, in the Regional Trial Court
(RTC) at Iloilo City, petitioner filed against Brgy. Lublub a complaint for Quieting of Title
and Recovery of Possession With Damages involving the 4.6-hectare area he had earlier
donated. Basically, petitioner claimed that the donation in question had ceased to be
effective, the donee barangay having failed to comply with the conditions of the
donation.

Trial court, on the nding that petitioner's action was already barred by extinctive
RULING:
(1) The Supreme Court held that the donation being valid and effective, virtually
forecloses any claim which petitioner may have over the donated property against
the donee and other occupants thereof, and his action to quiet title has no merit.
Militar was clothed with authority to accept the donation for respondent barangay.
On this point, petitioner cites Section 88 of Batas Pambansa Blg. 337 [16] - the law
then in force - and Sections 91 and 389 the Local Government Code of 1991. In gist,
these provisions empower the punongbarangay to enter into contracts for the
barangay upon authorization of the Sangguniang Barangay, or, in the alternative,
theSanggunian may authorize the barangay head to enter into contracts for the
barangay. Moreover, from the allegations of all the parties, it would appear that,
through the years, the Sanggunian of Lublub as well as all the succeeding
Sangunians of P.D. Monfort North neither repudiated the acceptance of the
donation by Militar nor acted in a manner reflective of their opposition to the
donation. On the contrary, the respondent barangay has been enjoying the material
and public-service benets arising from the infrastructures projects put up on the
subject property. In a very real sense, therefore, the Sangguniang Barangay and the
good people of P.D. Monfort North, by availing themselves of such benets for
more than two decades now, effectively ratified Militar's acceptance of the
donation.
(2) If the corresponding contract of donation expressly provides for automatic
rescission and/or reversion in case of breach of the condition therein, and the
donee violates or fails to comply with the condition, the donated property reverts
back automatically to the donor. Such provision, De Luna teaches, is in the nature
of an agreement granting a party the right to rescind a contract in case of breach,
without need of going to court and that upon the happening of the resolutory
condition or non- compliance with the conditions of the contract, the donation is
automatically revoked without need of a judicial declaration to that eect. Where,
however, the donee denies, as here, the rescission or challenges the propriety
thereof, then only the nal award of the court can, to borrow from University ofthe
Philippines vs.de los Angeles, "conclusively settle whether the resolution is proper
or not."
not contrary to law, . . . public order or public policy, we are of the opinion that, at
the very least, that stipulation of the parties providing for automatic revocation of
the deed of donation, without prior judicial action for that purpose, is valid subject
to the determination of the propriety of the rescission sought. Where such
propriety is sustained, the decision of the court will be merely declaratory of the
revocation, but it is not in itself the revocatory act. In the case at bench, it cannot
be gainsaid that respondent barangay denied or challenged the purported
revocation of the donation.
(3) Lest it be overlooked, the rule on the imprescriptibility of actions to quiet title
admits of exceptions. The trial court correctly mentioned one, referring to a
situation where the plainti in an action to quiet title is not in actual possession of
the land. In the case at bench, petitioner is not in possession of the property.
It may be recalled, respondent barangay had, under the terms of the deed of
donation, ve (5) years from the execution of the conveying deed in September
1981, or up September 1986, within which to introduce and complete the
contemplated development of the donated area. Following Article 764 of the Civil
Code, petitioner had four (4) years from September 1986, or up to September 1990,
within which to seek the revocation of the subject donation on the ground of
breach of contract. The Court can grant that the prescription of actions for the
revocation of onerous donations, as here, are governed by the general rules on
prescription, which, in context, is Article 1144 of the Civil Code providing that
actions upon a written contract shall be brought within ten (10) years from accrual
of the right of action. Ten years from September 1986 the date when petitioner's
right to revoke accrued would be September 1996. Here, however, what
partakes as petitioner's suit to revoke was led only in May 1998. In all, petitioner's
right of action to revoke or cancel the donation had indeed prescribed, regardless
of whether the applicable legal provision is Article 764 or the favorable Article 1144
of the Civil Code.

When a deed of donation expressly provides for automatic revocation and

reversion of the property donated, the rules on contract and the general rules on
prescription should apply, and not Article 764 of the Civil Code. Since Article 1306
of said Code authorizes the parties to a contract to establish such stipulations, . . .
 It should be stated in this regard, however, that respondent barangay had disputed
the existence of the grounds upon which petitioner anchored his right to revoke,
claiming it had already complied with the construction and development
conditions of the donation. From the records, it would appear that respondent
barangay's boast of compliance is not an empty one. As we see it, the establishment
on the donated area of telephone service, a water service, a police mobile force,
and a courtroom, all for the benets of the barangay residents, substantially
satises the terms and conditions of the subject donation. The concrete paving of
roads and the construction of government oces, sports complex for public
enjoyment and like infrastructures which, per respondent barangay's estimate, cost
not less than P25 Million, add persuasive dimension to the conclusion just made.
Petitioner's long silence vis- -vis the kind of development structures that Barangay
Lublub had decided to put up or allowed to be established on the subject area
cannot but be taken as an indicia of his satisfaction with respondent barangay's
choice of public service projects. The prolonged silence was broken only after the
provincial and municipal governments advertised, then sold the property in a
public auction to satisfy questionable tax liabilities.

(4) As between the parties to the donation and their assigns, the registration of the
deed of donation with the Registry of Deeds is not needed for its validity and
ecacy. In Pajarillo vs. Intermediate Appellate Court the Court emphatically
dismissed the notion that registration was necessary to make the donation a
binding commitment insofar as the donor and the donee were concerned.
 Noceda vs CA RULING:

(1) Yes. Donees act of occupying the portion pertaining to the donor without the
latters knowledge is an act of usurpation which is an offense against the property
FACTS:
of the donor, and considered as an act of ingratitude of a donee against the donor.
Aurora Directo (donor) donated a parcel of land to Rodolfo Noceda (donee), who is her
The law does not require conviction of the donee, it is enough that the offense be
nephew being the son of her deceased sister.
proved in action for revocation.
Sometime in 1981, donee constructed a house on the land donated to him.
Donor fenced the portion pertaining to her, excluding the donated lot.
(2) No. The action to revoke a donation by reason of ingratitude prescribes within one
However, in 1985, donee removed the fence earlier constructed by the donor and
year from: (1) the time the donor had knowledge of the fact and, (2) it was possible
fenced the entire lot without the donors consent. Donor demanded from donee to
for him to bring the action. The concurrence of these two requisites must be shown
vacate her land, but the latter refused.
by the donee in order to bar the present action. Donee failed to do so. He reckoned
Hence, donor filed a complaint for recovery of possession and rescission of donation,
the 1 year prescriptive period from the occurrence of the usurpation of the
on the ground of ingratitude.
property and not from the time the donor had knowledge of the usurpation.
Moreover, donee failed to prove that at the time the donor acquired knowledge of
his usurpation, it was possible for the donor to institute an action for revocation.
ISSUE: Basic is the rule that he who alleges a fact has the burden of proving it and a mere
1) Whether the donation may be revoked. allegation is not evidence.
2) Whether the action has prescribed.
 ESGUERRA vs MANANTAN
FACTS:
- This case stemmed from the complaint for ejectment filed by petitioner Franco
Esguerra against respondents before the RTC.
- On April 14, 1992, Franco filed his application for free patent of the subject
property. On May 20, 1992, Free Patent No. 034914-92-1117 was issued in his
name.
- The Register of Deeds of the Province of Nueva Ecija issued Original Certificate of
Title (OCT) No. P-15176 in Francos name.
- Thereafter, Franco demanded that respondents vacate the premises, but they
refused to do so. He then filed a complaint for ejectment against them before the
RTC
- Pending the ejectment case, respondents filed a case for annulment of OCT No. P-
15176
The RTC dismissed the complaint for ejectment and declared null and void OCT No. P-
15176.
Franco appealed to the Court of Appeals. The appellate court denied the appeal and
affirmed the trial courts decision.
- The respondents had acquired title over the same for having been in actual
adverse possession of the subject property for 30 years.
- On the issue of redemption, the appellate court held that under Article 1606 7
of the Civil Code of the Philippines, Pios right to redeem the property had
already prescribed.
[ALFONSO & DANILO MANANTAN] Respondents Contentions:
[FRANCO ESGUERRA] Petitioners Contentions:
he is the registered owner of a parcel of land surveyed as Lot No. 661 situated
in Barangay San Cristobal, Licab, Nueva Ecija
That he inherited it from his father, Pio Esguerra, who had inherited it from his
father, Lorenzo Esguerra. Pio allowed Gaudencio Miguel4 to occupy his
property and later mortgaged the land to Gaudencio as evidenced by a
document entitled "Deed of Sale with Right to Repurchase" dated June 6,
1960.
In 1979, Gaudencio executed an instrument denominated as Kasunduan to
cancel said deed of sale with the right to repurchase.
Before the repurchase of the property, respondents Alfonso Manantan, Danilo
Manantan, Ariang Antonio, Aquilino Concepcion and Fortunato Miguel
constructed their houses on the lot without the knowledge and consent of Pio.
That respondents occupied the subject property by mere tolerance of
Gaudencio even without the permission of Pio.
He also avers that since respondents possession has not been open,
continuous, exclusive and notorious for 30 years, they have not acquired the
property through prescription. According to him, the subject property was
already redeemed on December 24, 1978 as evidenced by theKasunduan
executed by Gaudencio in 1979.
He contends that respondents action to annul the title on the ground of fraud
has prescribed since they filed it two years after the issuance of title.
He avers that the action should have been filed within one year after the date
of the issuance of the decree of registration.
He further claims that the respondents have no personality to question his title
because only the State has the right to do so.
Maintains that they had established their open and continuous possession of
the subject property for 30 years and that they had been paying the real estate
taxes of the property.
That Franco neither possessed nor improved the subject property and even
admitted that respondents possessed the property.
They maintain that their action for annulment of title has not prescribed since
what they actually filed was an action for reconveyance which prescribes after
ten years from registration of title.
ISSUE: Acquisitive prescription is a mode of acquiring ownership by a possessor through the
requisite lapse of time. In order to ripen into ownership, possession must be in the
Who has a better right over the contested property? concept of an owner, public, peaceful and uninterrupted. Thus, mere possession with
a juridical title, such as by a usufructuary, a trustee, a lessee, an agent or a pledgee, not
being in the concept of an owner, cannot ripen into ownership by acquisitive
RULING:
prescription, unless the juridical relation is first expressly repudiated and such
It was established that the subject land is private property since time immemorial. repudiation has been communicated to the other party. Acts of possessory character
Records reveal that the property was cultivated as riceland and was first declared for executed due to license or by mere tolerance of the owner would likewise be
tax purposes under the name of Graciano Agustin. On June 6, 1960, Pio exercised acts inadequate. Possession, to constitute the foundation of a prescriptive right, must be en
of ownership over the land by entering into a notarized contract of sale with the right concepto de dueo, or, to use the common law equivalent of the term, that possession
to repurchase with Gaudencio. He declared in the contract that he had inherited the should be adverse, if not, such possessory acts, no matter how long, do not start the
land from his father and had been in possession of the property for 27 years. running of the period of prescription.27
In the Kasunduan executed on April 25, 1979, Gaudencio acknowledged that Pio owned Clearly, respondents, when they agreed to pay rent, became mere lessees and their
the land. Pio further disposed of the property in his last will and testament in favor of possession cannot ripen into ownership. They also did not present proof of ownership.
his heirs which include petitioner. Although the will is void for not complying with the The tax receipts offered in evidence merely showed that they paid the taxes due only
formal requisites of a notarial will, it may be used to show the exclusive and adverse after petitioner filed a complaint against them. Such payment without adverse
character of petitioners possession as a co-heir and co-owner.16 It also appears that possession does not prove ownership.
respondents occupied the property on permission of Gaudencio. While petitioner did
not actually reside and cultivate the land, Gaudencio had agreed to pay buwis or rentals
for the houses built thereon by Fortunato Miguel and Alfonso Manantan. 17Aquilino However, while this Court declares that Lot No. 661 is a private property and not part
Concepcion also agreed to pay the rent.18 Clearly, the evidence on record shows that of the public domain, the petitioners title as co-owner of the said lot is imperfect and
the property belonged to Pio and upon his death, passed on to his heirs. still subject to the rules on confirmation of title under Section 48 (b)28 of the Public Land
Act.29 As an applicant for confirmation of title, petitioner has the burden of proving that
Gaudencio still recognized Pio as the owner of the property and stated in a notarized
he meets the requirements of the law.30
document that the property was mortgaged to him ("naisanla sa akin") and that he
received Pios payment of the debt, the same amount under the purported contract of Petitioner Franco Esguerra is declared a co-owner and holder of imperfect title over Lot
sale.22 Notably, both documents are considered public documents and enjoy the No. 661.Free Patent No. 034914-92-1117 and Original Certificate of Title No. P-15176,
presumption of validity as to its authenticity and due execution. This legal presumption both in the name of Franco Esguerra are declared null and void.
was not overcome by respondents.23 Other than the objection that the property subject
of the documents is public land, no other proof was presented. Thus, the presumption
of validity of these documents prevails.
The appellate court erred in ruling that respondents had acquired the property through
prescription. As borne by the testimonies of Alfonso Manantan, 24 Fortunato Miguel,25
and Danilo Manantan,26 they occupied the property, not as owners but upon
permission of Gaudencio. As already established, Gaudencio did not have open,
continuous and adverse possession of the property. Moreover, on November 13, 1979,
petitioner and Gaudencio agreed that the latter shall pay rent on the land where the
houses of Fortunato and Alfonso were built. Thereafter, Aquilino Concepcion and a
certain Pedro Antonio also agreed to pay rent. These circumstances belie respondents
claim of acquisitive prescription.
 BAUTISA vs POBLETE
FACTS:
RESPONDENTS, successors-in-interest of Socorro Reyes vda. de Poblete (Socorro)
[Daughter of Marcelo Sr. from his second Marriage], filed for a petition to have LOT NO.
1243 under their name since they already sold it to Winthrop Corporation for P20
million, of which P3 million has been paid, and the balance to be paid upon registration
of the land.
This was opposed by PETITIONERS, Children of Marcelo Sr. from a third Marriage.
Respondents Contentions:
o CELIA POBLETE:
She and her sisters bought Lot No. 1243 for P39,000.00 from her
mother, who acquired it more than fifty years before from her father
Marcelo Reyes, Sr.
She brought the deed of sale to the Provincial Capitol and had the tax
declaration transferred to her and her and her sisters names, and they
have been paying the real estate tax since then.
Their mother and they have been in possession of the property for 60
years already.
The oppositors are half brothers and sisters of her mother, and they
had good relations before.
The oppositors knew about the exclusive possession of Lot No. 1243 by
their mother, because they lived only some 150 meters away and saw
their mother harvesting the fruits of the land. They sometimes even
asked her for some of the harvest of the land but they never made a
claim on it.

That Lot 1243 was donated by Marcelo Reyes Sr. (Marcelo Sr.) to Socorro, his
daughter by a second marriage; Petitioners Contentions:
That the cadastral survey of Lot 1243 had been undertaken primarily for and in the
That Lot 1243 had been acquired by the deceased Marcelo Reyes, Sr. by
name of Socorro;
purchase from a certain Juan Aranda. Hence, said lot should be awarded to
That they purchased the same land from their parents Socorro and Juan Poblete;
them as their fathers lawful heirs.
and
Petitioners insist that Socorro expressly and impliedly recognized their rights
That they and their predecessors in interest have been in open, continuous,
as her co-heirs when she was entrusted with the management of the land in
peaceful and notorious possession of the subject lot in the concept of owner for
1934;
more than 50 years.
o that the harvest had always been divided among the heirs, with
Presented 3 WITNESSES: petitioner Dominador Sino representing the others in getting their
o SOCORRO REYES VDA. DE POBLETE:
respective shares;
That Lot No. 1243 was given to her by her father, Marcelo Reyes, Sr. in 1932,
by way of a deed of donation which was destroyed when her house was o that there was a demand for partition but it did not push through
burned. because the land was tenanted.
She had Lot No. 1243 planted to sugar cane and palay, and had the same
surveyed by the Bureau of Lands in her name.
She also had it tax declared in her name and had been paying the taxes
thereon until she sold it to her children, the petitioners herein.
She did not have the land registered at once because she thought that it first
had to be tax declared.
o PANTALEON GARCIA ANCERO:
Testified that he was working in Lot No. 1243 since 1942 or 1943 first as a
tenant of Socorro Reyes and thereafter of petitioner Celia Poblete.
RTC:
No Deed of Donation = Dismissed We find no reversible error in the appellate courts decision. Thus, we declare that no
co-ownership existed between petitioners and respondents.
CA:
WHEREFORE, the petition is hereby DENIED and the assailed decision AFFIRMED. Costs
Considered private respondents contention that even if the donation may against petitioners.
have been invalid, the same could still serve as basis for acquisitive
prescription.
Ordered the issuance of a decree of registration over Lot 1243 in favor of
private respondents.

RULING:
The appellate court, upon meticulous review of the records, found that private
respondents possession of Lot 1243 since 1934 was adverse, continuous, open, public,
peaceful and uninterrupted, and in the concept of an owner. This case was filed only in
1991. All this time, Socorro was exercising acts of dominion over the land such as
enjoying its fruits to the exclusion of all others, having the land cadastrally surveyed in
her name and faithfully paying realty taxes on Lot 1243 in her name. Assuming but not
conceding that there existed an implied trust between the parties, Socorros
aforementioned acts of dominion clearly repudiated such trust.

It is the essence of the statute of limitations that, whether the party had the right to
the possession or not, if he entered under the claim of such right and remained in
possession for the period required for acquisitive prescription, the right of action of a
party claiming title is barred by that adverse possession. The right given by the statute
of limitations does not depend on and has no necessary connection to the validity of
the claim under which the possession is held.

It is a settled rule that findings of fact of the Court of Appeals are binding upon this
Court if borne out by the evidence on record. Socorro obtained possession of the land
even before Marcelo Sr. died. After his death, Socorro continued to enjoy exclusive
possession of the land with no objection from petitioners. The land was cadastrally
surveyed and tax-declared in her name, again with no protestation from petitioners. It
was only when Lot 1243 was sold for P20.7 million that petitioners suddenly fantasized
about being co-owners thereof and wanted to share in the bonanza.

Petitioners failed to present proof of their claim. There was no evidence showing that
Socorro managed Lot 1243 on behalf of Marcelo Sr.s heirs, including petitioners. The
fact that petitioner Dominador Sino allegedly got a share of the harvest twice did not
disprove at all that the entire harvest belonged to Socorro. At most, these two
occasions only proved Socorros generosity to him, considering that he was an
illegitimate child and received almost nothing by way of inheritance.
 MULTI-REALTY DEVELOPMENT CORPORATION vs THE
MAKATI TUSCANY CONDOMINIUM CORPORATION
FACTS:
Multi-Realty is a domestic corporation engaged in the real estate business, and the
construction and development of condominiums. It developed, among others, the Ritz
Towers Condominium, and the former Galeria de Magallanes, both built in the
Municipality (now city) of Makati. ON the other hand, Pursuant to Republic Act No.
4726, otherwise known as the Condominium Act, the Makati Tuscany Condominium
Corporation (MATUSCO) was organized and established to manage the condominium
units. It appears that a Master Deed and Declaration of Restrictions pertaining to the
building was executed.
The dispute arose when the parties came into a conflict in relation to the designated
and unassigned parking lots inside the building.
Multi-Realty alleged therein that it had retained ownership of the 98 unassigned
parking slots. Considering, however, that Makati Tuscany was one of its first
condominium projects in the Philippines, this was not specified in Section 7(d) of the
Master Deed since the documentation and the terms and conditions therein were all
of first impression. It was further alleged that the mistake was discovered for the first
time when MATUSCO rejected its request to allow its (Multi-Realtys) executives to park
their cars in two of the unassigned parking lots.
In its Answer with counterclaim, MATUSCO alleged that Multi-Realty had no cause of
action against it for reformation of their contract. By its own admission, Multi-Realty
sold various parking slots to third parties despite its knowledge that the parking areas,
other than those mentioned in Sec. 5 of the Master Deed, belonged to MATUSCO.
The RTC dismissed the petition considering that Multi-Realty failed to prove any ground
for the reformation of its agreement with MATUSCO relative to the ownership of the
common areas. Subsequently, the Court of Appeals dismissed the appeal on the ground
of prescription.
ISSUE:
Whether the CA erred in dismissing petitioners appeal on the ground of prescription?
RULING:
Given the factual backdrop of the case, it was inappropriate for the CA, motu proprio,
to delve into and resolve the issue of whether petitioners action had already prescribed.
The appellate court should have proceeded to resolve petitioners appeal on its merits
instead of dismissing the same on a ground not raised by the parties in the RTC and
even in their pleadings in the CA.
Even if the court would sustain the ruling of the CA that it acted in accordance with the
Rules of Court in considering prescription in denying petitioners appeal, the Court
found and so rule that it erred in holding that petitioners action had already prescribed
when it was filed in the RTC on April 26, 1990.
Prescription is rightly regarded as a statute of repose whose object is to suppress
fraudulent and stale claims from springing up at great distances of time and surprising
the parties or their representatives when the facts have become obscure from the lapse
of time or the defective memory or death or removal of witnesses. The essence of the
statute of limitations is to prevent fraudulent claims arising from unwarranted length
of time and not to defeat actions asserted on the honest belief that they were
sufficiently submitted for judicial determination. Our laws do not favor property rights
hanging in the air, uncertain, over a long span of time.
Article 1144 of the New Civil Code provides that an action upon a written contract must
be brought within ten (10) years from the time the right of action accrues:
Art. 1144. The following actions must be brought within ten years from the
time the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
In relation thereto, Article 1150 of the New Civil Code provides that the time for
prescription of all actions, when there is no special provision which ordains otherwise,
shall be counted from the day they may be brought. It is the legal possibility of bringing
the action that determines the starting point for the computation of the period of
prescription.
JOSE C. CRISTOBAL vs ALEJANDRO MELCHOR and FEDERICO
ARCALA
FACTS:
The present case stemmed from a complaint for declaratory relief and reinstatement
filed by appellant. It appears that he, along with others, were part of the number of
workers terminated from the Office of The President. Aggrieved, some of the
employees filed a civil case, others were reinstated, and those remaining were given
the assurance that they will be given placements in certain offices. The herein plaintiff
was one of those who had not been fortunate enough to be reappointed to any
positions as befits his qualifications. While the civil case was still pending, appellant was
given an assurance by the Secretary Mutuc of the Office of the President that he will be
given a position and reinstated. The former then relied on the promise and did not do
any subsequent action. Unfortunately, when the appellant wrote a letter requesting for
reinstatement on the strength of the decision pertaining to the civil case, it was
dismissed for his alleged failure to act within one year.
The defendants represented by the Office of the Solicitor General alleged that plaintiff
Jose Cristobal had no cause of action as he is deemed to have abandoned his office for
failure to institute the proper proceedings to assert his right within one year from the
date of separation pursuant to Sec. 16, Rule 66 of the Rules of Court, he having come
to court only after the lapse of more than nine years, thereby in effect acquiescing to
his separation, and therefore he is not entitled to any salary from termination of his
emploment.
The RTC rendered a decision dismissing the complaint.
ISSUE:
Is the principle of laches or non-compliance with the "Statute of Limitations" applicable
against appellant?
RULING:
The doctrine of laches is an equitable principle applied to promote but never to defeat
justice. Thus, where laches is invoked against a plaintiff by reason of the latter's failure
to come to court within the statutory period provided in the law, the doctrine of laches
will not be taken against him where the defendant is shown to have promised from
time to time to grant the relief sought for. Where a defendant or those claiming under
him recognized or directly or impliedly acknowledged existence of the right asserted by
a plaintiff, such recognition may be invoked as a valid excuse for a plaintiff's delay in
seeking to enforce such right. In brief, it is indeed the better rule that courts, under the
principle of equity, will not be guided or bound strictly by the statute of limitations or
the doctrine of laches when to do so, manifest wrong and injustice would result.
The evidence of Cristobal establish the following: After the Ingles suit was filed in court,
the dismissed employees, Cristobal included, continued to seek reconsideration of their
dismissal. It was then that Executive Secretary Mutuc assured the employees that
without prejudice to the continuation of the civil action, he would work for their
reinstatement
In the meantime, however, Secretary Mutuc was replaced by other Executive
Secretaries to whom Cristobal over and over again presented his request for
reinstatement and who gave the same assurance that Cristobal would be recalled and
re-employed at "the opportune time.
Surely, it would now be the height of inequity and cutting a deep wound in Our sense
of justice, if after Cristobal relied and reposed his faith and trust on the word and
promises of the former Executive Secretaries who dealt with him and who preceded
the herein respondent Executive Secretary Melchor, We are to hold that he lost his right
to seek relief because of lapse of time.
 VIOLETA ALDOVINO, et. Al vs SECRETARY RAFAEL ALUNAN III
FACTS:
The petitioners herein were affected by reorganizing of Ministry of Tourism as provided
in Section 29 of Executive Order No. 120 which took effect on January 30,1987. These
EO provides that incumbents whose positions are not included in the new position
structure and staffing pattern or who are not reappointed are deemed separated from
the service. Pursuant to this, the Department of Tourism (DOT, formerly the Ministry of
Tourism) issued various office orders and memoranda declaring all positions thereat
vacant. To that effect, it lead to the separation of many of its employees including the
petitioners. It can be noted that The court had previously decided similar cases of
Mandani, Abrogar and Arnaldo. The petitioners and intervenors claimed that they
should not be deprived of the relief granted to their former co-employees when they
prayed for reinstatement without the loss of seniority rights. Furthermore, they
claimed for back salaries will be computed under the new staffing pattern from dates
of their invalid termination at rates not lower than their former salaries.
RULING:
What public respondents brought up was the doctrine of laches, not prescription; and
laches is different from prescription. The defense of laches applies independently of
prescription. While prescription is concerned with the fact of delay, laches is concerned
with the effect of delay. Prescription is a matter of time; laches is a question of inequity
of permitting a claim to be enforced, this inequity being founded on some change in
the condition of the property or the relation of the parties. Prescription is statutory;
laches is not. Laches applies in equity, whereas prescription applies at law. Prescription
is based on fixed time, laches is not. Further, prescription may not be considered at this
late stage, not only because it was never raised and therefore now foreclosed, but more
importantly, because it must yield to the higher interest of justice. To institute a rigid
application of the doctrine of prescription would be highly injurious to the greater
interest of substantial justice.

For the respondents part, they argued that the petitioners filed this petition and the
interventions only in October 1991, and February, March, May and July 1992, or more
than four (4) years later, hence, they are barred by prescription for allegedly sleeping
on their rights.

ISSUE:
WON petitioners action should be dismissed because of prescription?
HEIRS OF DICMAN vs JOSE CARIO and COURT OF APPEALS
FACTS:
The present dispute stems from an action for recovery of possession of a parcel of land
that is claimed by both parties. Its history can be traced back from a purchase made by
respondents predecessor-in-interest, Sioco Carino. In order to provide maintenance to
the land, he employed petitioners predecessor-in interest, Ting-el Dicman, as a cattle
herder. Sioco Carino then opted to register the disputed land in question and upon the
advice of his lawyer, and because of so many other lands under his name, the title was
placed in the name of Ting-el Dicman. Shortly thereafter, a Deed of Conveyance was
issued by Dicman in favor of Sioco Carino over half of the total property in Dicmans
name. After the execution of the foregoing deed, Sioco Cario, who had been in
possession of the land in controversy since 1916, continued to stay thereon.
On January 10, 1938, Sioco Cario executed, as seller, a public instrument entitled
"Deed of Absolute Sale" covering the subject land and its improvements with his son,
Guzman Cario, as buyer. Guzman immediately took possession of the land publicly,
peacefully, and in the concept of an owner. In order to clearly establish the proper
boundaries of the two lots, he undertook a resurvey which yielded the indication of the
boundaries and areas of his land. On the strength of the survey findings, he filed an
application for free-patent over the land which he later withdrew when the petitioners
suddenly filed a petition claiming ownership of the entirety of the land including the
respondents. The trial court rendered a partial judgment and confirmed that the title
over Lot 76-A belonged to the heirs of Ting-el Dicman, there having been no adverse
claim. But as to Lot 76-B, the trial court found it necessary to hold further hearing in
order to decide on the adverse claims of the parties.
The case was eventually dismissed when the Supreme Court made a ruling pursuant to
the case of Republic v. Marcos that Courts of First Instance of Baguio have no
jurisdiction to reopen judicial proceedings on the basis of Republic Act No. 931. After
this dismissal, Guzman Carino was left undisturbed in his possession of the subject
property until his death.
For the part of the respondent, he contended that he has been in possession of the
subject property for 55 years peacefully, in good faith, and in concept of owner and
therefore perfected title over the same through acquisitive prescription.
The RTC then rendered a decision in favor of private respondent affirming the
possession done by private respondent.
Similarly, the Court of Appeals affirmed the lower courts decision in toto.
ISSUE:
WON the private respondents acquired the land in dispute through prescription?
RULING:
The records show that as early as 1938, the land in controversy had been in the
possession of Guzman Cario, predecessor-in-interest of private respondent,
continuously, publicly, peacefully, in concept of owner, and in good faith with just title,
to the exclusion of the petitioners and their predecessors-in-interest, well beyond the
period required under law to acquire title by acquisitive prescription which, in this case,
is 10 years.38 The findings of fact of the lower courts, and which this Court has no reason
to disturb, inescapably point to this conclusion: immediately after the "Deed of
Absolute Sale," a public instrument dated January 10, 1938, had been executed by Sioco
Cario in favor of his son, Guzman Cario (the father of private respondent), the latter
immediately occupied the property; the 1940 directory of Baguio Telephones lists his
residence at Camp 7, Baguio City along with his telephone number; his permitting the
use of portions of the property to various third parties; his introduction of
improvements over the land in controversy; the testimonial accounts of his neighbors;
and that it was Guzman Cario alone who declared for tax purposes both the land and
the improvements thereon in his name, while the tax declarations of the other
claimants made no reference to the subject property.39 Although arguably Sioco Cario
may not have been the owner of the subject property when he executed the "Deed of
Absolute Sale" in 1938 in favor of his son, the requirement of just title is nonetheless
satisfied, which means that the mode of transferring ownership should ordinarily have
been valid and true, had the grantor been the owner.40 By the time the successors-in-
interest of Ting-el Dicman sought to establish ownership over the land in controversy
by filing their "Petition of the Heirs of Dicman to Reopen Civil Reservation Case No. 1,
G.L.R.O. 211" on April 24, 1959 with the trial court, and which Guzman timely opposed,
more than 20 years had already elapsed. Thus, the 10-year period for acquisitive
prescription is deemed satisfied well before Guzmans possession can be said to be
civilly interrupted by the filing of the foregoing petition to reopen. 41 After the dismissal
of that case on July 28, 1978, Guzman Cario was left undisturbed in his possession of
the subject property until his death on August 19, 1982. His remains are buried on the
land in question. Thereafter, Guzmans widow and son, herein private respondent,
continued possession of the subject property in the same manner. When petitioners,
heirs of Ting-el Dicman, tried to revive the case on April 20, 1983, they had, far before
that time, lost all rights to recover possession or ownership.
 Heirs of T. Dolleton v. Fil-Estate
FACTS:
Petitioners Dolleton, et al. filed separate Complaints for quieting of title and/or
Recovery of Ownership and possession with Preliminary Injunction/Restraining Order
and Damages against respondents Fil-Estate Management Inc. They alleged that they
are in OCEN possession of the subject parcels of land. The respondents, on the other
hand, moved for the dismissal of the eight Complaints on the grounds of
(1) prescription;
(2) laches;
(3) lack of cause of action; and
(4) res judicata..
Respondents alleged that the subject parcels of land were already registered under the
Torrens system in their names. Respondents also contended that petitioners were guilty
of laches. Despite their alleged possession of the subject properties for 90 years,
petitioners failed to take any steps to oppose the land registration cases involving the
same properties or to seek the nullification of the decrees of registration and
certificates of title which were entered and issued as early as 1966 and 1967.
RTC dismissed the complaint as the court determined that the subject properties were
already registered in the names of respondents, and that petitioners were unable to
prove by clear and convincing evidence their title to the said properties.
CA affirmed RTCs ruling. The appellate court found that respondents titles to the subject
properties were indefeasible because they were registered under the Torrens system.
Thus, petitioners could not say that any claim on the subject properties casts a cloud on
their title when they failed to demonstrate a legal or an equitable title to the same. The
Court of Appeals also ruled that petitioners actions had already prescribed
ISSUE:
WON the Complaints filed by petitioners are barred by prescription and laches?
RULING:
No. Complaints filed by petitioners are not barred by prescription and laches.
The affirmative defense of prescription does not automatically warrant the dismissal of
a complaint under Rule 16 of the Rules of Civil Procedure. An allegation of prescription
can effectively be used in a motion to dismiss only when the Complaint on its face shows
that indeed the action has already prescribed. If the issue of prescription is one
involving evidentiary matters requiring a full-blown trial on the merits, it cannot be
determined in a motion to dismiss. In the case at bar, respondents must first be able to
establish by evidence that the subject properties are indeed covered by their
certificates of title before they can argue that any remedy assailing the registration of
said properties or the issuance of the certificates of title over the same in the names of
respondents or their predecessors-in-interest has prescribed.
Neither did the Court sustain respondents assertion that petitioners Complaints were
barred by laches.
Laches has been defined as the failure of or neglect, for an unreasonable and
unexplained length of time, to do that which by exercising due diligence, could or should
have been done earlier; or to assert a right within reasonable time, warranting a
presumption that the party entitled thereto has either abandoned it or declined to
assert it. Thus, the doctrine of laches presumes that the party guilty of negligence had
the opportunity to do what should have been done, but failed to do so. Conversely, if
the said party did not have the occasion to assert the right, then, he cannot be adjudged
guilty of laches. Laches is not concerned with the mere lapse of time; rather, the party
must have been afforded an opportunity to pursue his claim in order that the delay may
sufficiently constitute laches.
Going back to petitioners chief claim that the subject properties are distinct from the
land covered by respondents certificates of title, then, petitioners would have no
standing to oppose the registration of the latter property in the names of respondents
or their predecessors-in-interest, or to seek the nullification of the certificates of title
issued over the same.
It also appears from the records that the RTC did not conduct a hearing to receive
evidence proving that petitioners were guilty of laches. Well-settled is the rule that the
elements of laches must be proven positively. Laches is evidentiary in nature, a fact that
cannot be established by mere allegations in the pleadings and cannot be resolved in a
motion to dismiss. At this stage, therefore, the dismissal of petitioners Complaints on
the ground of laches is premature. Those issues must be resolved at the trial of the case
on the merits, wherein both parties will be given ample opportunity to prove their
respective claims and defenses.
 CONSTANTE AMOR DE CASTRO and CORAZON AMOR DE
CASTRO, vs. CA and FRANCISCO ARTIGO
FACTS:
On May 29, 1989, private respondent Francisco Artigo (Artigo for brevity) sued
petitioners Constante A. De Castro (Constante for brevity) and Corazon A. De Castro
(Corazon for brevity) to collect the unpaid balance of his brokers commission from the
De Castros.
Appellants were co-owners of four (4) lots located at EDSA corner New York and Denver
Streets in Cubao, Quezon City. In a letter dated January 24, 1984, appellee was
authorized by appellants to act as real estate broker in the sale of these properties and
five percent (5%) of which will be given to the agent as commission. It was appellee who
first found Times Transit Corporation, represented by its president Mr. Rondaris, as
prospective buyer which desired to buy two (2) lots only, specifically lots 14 and 15.
Eventually, sometime in May of 1985, the sale of lots 14 and 15 was consummated.
Appellee received from appellants P48,893.76 as commission.
It was then that the rift between the contending parties soon emerged. Appellee
apparently felt short changed because according to him, his total commission should be
P352,500.00 which is five percent (5%) of the agreed price of P7,050,000.00 paid by
Times Transit Corporation to appellants for the two (2) lots, and that it was he who
introduced the buyer to appellants and unceasingly facilitated the negotiation which
ultimately led to the consummation of the sale. Hence, he sued below to collect the
balance of P303,606.24 after having received P48,893.76 in advance.
On the other hand, appellants completely traverse appellees claims and essentially
argue that appellee is selfishly asking for more than what he truly deserved as
commission to the prejudice of other agents who were more instrumental in the
consummation of the sale. Furthermore, the purchase price for the two lots was only
P3.6 million as appearing in the deed of sale and not P7.05 million as alleged by
appellee. Thus, even assuming that appellee is entitled to the entire commission, he
would only be getting 5% of the P3.6 million, or P180,000.00. The De Castros further
argue that laches should apply because Artigo did not file his complaint in court until
May 29, 1989, or almost four years later. Hence, Artigos claim for the balance of his
commission is barred by laches.
The trial court found that the purchase price was P7.05 million and not P3.6 million.
The Court of Appeals affirmed in toto the decision of the trial court
ISSUES:
WON respondent is barred by laches?
RULING:
NO. Artigo is not barred by laches. De Castros defense of laches finds no support in law,
equity or jurisprudence.
Laches means the failure or neglect, for an unreasonable and unexplained length of
time, to do that which by exercising due diligence could or should have been done
earlier. It is negligence or omission to assert a right within a reasonable time, warranting
a presumption that the party entitled to assert it either has abandoned it or declined to
assert it.
Artigo disputes the claim that he neglected to assert his rights. He was appointed as
agent on January 24, 1984. The two lots were finally sold in June 1985. As found by the
trial court, Artigo demanded in April and July of 1985 the payment of his commission
by Constante on the basis of the selling price of P7.05 million but there was no response
from Constante. After it became clear that his demands for payment have fallen on deaf
ears, Artigo decided to sue on May 29, 1989.
Actions upon a written contract, such as a contract of agency, must be brought within
ten years from the time the right of action accrues. The right of action accrues from the
moment the breach of right or duty occurs. From this moment, the creditor can institute
the action even as the ten-year prescriptive period begins to run.
The De Castros admit that Artigos claim was filed within the ten-year prescriptive
period. The De Castros, however, still maintain that Artigos cause of action is barred by
laches. Laches does not apply because only four years had lapsed from the time of the
sale in June 1985. Artigo made a demand in July 1985 and filed the action in court on
May 29, 1989, well within the ten-year prescriptive period. This does not constitute an
unreasonable delay in asserting ones right. The Court has ruled, a delay within the
prescriptive period is sanctioned by law and is not considered to be a delay that would
bar relief.[21] In explaining that laches applies only in the absence of a statutory
prescriptive period, the Court has stated -
Laches is recourse in equity. Equity, however, is applied only in the absence, never in
contravention, of statutory law. Thus, laches, cannot, as a rule, be used to abate a
collection suit filed within the prescriptive period mandated by the Civil Code.
 NATIVIDAD DEL ROSARIO VDA. DE ALBERTO vs CA and
ANTONIO J. ALBERTO, JR
FACTS:
Antonio Alberto Jr., assisted by his mother, Andrea Jongco filed a complaint for
acknowledgment and partition. He alleged, in substance, that in 1941 his alleged father,
Antonio C. Alberto, and his mother, Andrea Jongco, lived together as husband and wife
and as a result of which, he was born on September 10, 1942; that during the time that
his alleged father and mother lived together as husband and wife and up to the time of
his birth, both were single and had no legal impediment to marry each other; that after
his birth, his father and mother continued living together as husband and wife, his
father supporting them and introducing him to the public as his natural child; that even
the family of his father recognized him as such.
About the year 1944, his father and mother separated, and subsequently, his father
married herein petitioner Natividad del Rosario, as a result of the marriage, two (2)
children were born herein petitioners Lourdes Alberto and Antonio Alberto, Jr. That
although his father was separated from his mother, he continued to support him and
recognized him as his own child;
On July 3, 1949, his father died, and without notice to him, petitioner Natividad del
Rosario Vda. de Alberto, on July 17, 1949, instituted before the then Court of First
Instance of Manila an intestate proceedings for the estate of his deceased father in the
said intestate proceedings, petitioners deliberately omitted him as one of the heirs and
for this reason they succeeded in having the properties of his deceased father
adjudicated and partitioned among themselves. Further, he alleged that he had
absolutely no previous knowledge of the intestate proceedings and came to know about
it only recently and thereupon made a demand from the petitioners who refused to
give him his share. Accordingly, he prays that the petitioners be ordered to acknowledge
him as the natural child of Antonio C. Alberto; that his one-fourth share be turned over
to him.
Petitioners filed a Motion to Dismiss on the grounds that (1) the cause of action is
barred by prior judgment; and (2) that the cause of action is also barred by the statute
of limitation. To this motion, private respondents filed an opposition.
RTC dismissed the complaint.
Private respondent, not satisfied with the decision, appealed to respondent Court, and
respondent Court reversed the decision of the trial court.
ISSUE:
WON respondent is barred by prescription?
RULING:
YES. The respondent is barred by prescription.
The Civil Code of the Philippines clearly provides:
Art. 1100. The action for rescission on account of lesion shall prescribe after four years
from the time the partition was made.
Intestate proceedings were terminated as alleged in the complaint itself on November
9, 1953 so that said four years prescriptive period expired on November 9,1957. Hence,
the present action filed on September 8, 1960 and which has for one of its objects the
rescission of the agreement of partition among the petitioners, as approved by the
intestate court, is already barred by prescription.
That an action for rescission is also the proper action in case of an alleged preterition of
a compulsory heir by reason of alleged bad faith or fraud of the other persons
interested, which is what the complaint in this case alleges in substance, is indicated in
Article 1104 of the Civil Code as follows:
Art. 1104. A partition made with preterition of any of the compulsory heirs shall not be
rescinded, unless it be proved that there was bad faith or fraud on the part of the other
persons interested; ...
It has also been ruled by this Court that the four years period provided in Article 1100
of the Civil Code (formerly Art. 1076 of the old Civil Code) should commence to run from
the approval of the agreement of partition by the Court (Samson vs. Araneta, 60 Phil.
27, 36). Thus, in the case at bar, it is evident that the action to rescind the Agreement
of Partition which was approved by the Court on November 9, 1953, had already
prescribed when respondent filed the complaint in the case at bar on September 8,
1960.
While as a general rule the action for partition among co-owners does not prescribe so
long as the co-ownership is expressly or impliedly recognized (Art. 494, Civil Code),
petitioners herein had never recognized respondent as a co-owner or co-heir either
expressly or impliedly. Consequently, the rule on non-prescription of action for partition
of property owned in common (Art. 494) does not apply to the case at bar.
Moreover, private respondent cannot claim exemption from the effects of prescription
on the plea of minority under the New Civil Code which provides:
Art. 1108. Prescription, both acquisitive and extinctive, runs against: (1) Minors and
other incapacitated persons who have parents, guardians or other legal representatives:
Respondent Alberto, Jr. who has a living parent, his mother, Andrea Jongco, who in fact
filed the complaint in the case at bar for him, falls squarely under the above-cited
provision.
Granting arguendo that respondent is a natural child of the deceased Antonio Alberto,
Sr., the action for recognition of natural child may be brought only during the lifetime
of the presumed parent. And if the presumed father or mother died during the minority
of the child, the latter may file the action within four (4) years from the attainment of
majority (Art. 285 [1]). However, if the minor has a guardian as in this case, prescription
runs against him even during minority. In such case, the action for recognition must be
instituted within four (4) years after the death of the natural father. Antonio C. Alberto,
Sr., the alleged father, died on July 3, 1949. The complaint for acknowledgment and
partition was filed eleven (11) years later, on September 8, 1960. Hence, prescription
had set in.
Neither can it be claimed that the present action is in substance one for recovery of
property in order to avoid the consequences of prescription, for as correctly stated by
the petitioners, to be entitled to the recovery of the property from the estate, Alberto,
Jr. must first rescind the partition and distribution approved by the intestate
proceedings, otherwise, the recovery of any property from the petitioners is not
possible. Be that as it may, such partition can no longer be rescinded having been
already barred by the Statute of Limitations.
Furthermore, even granting that Article 1104 of the Civil Code does not apply and there
is an injury to the rights of plaintiff, still action would still not prosper under Articles
1146 and 1149 of the same Code which provide that the action must be brought within
four and five years, respectively, from the time the right of action accrues.
 BOGO-MEDELLIN MILLING CO. INC. V CA
FACTS:
Appeal by certiorari under Rule 45 .Magdaleno Valdez, Sr., father of respondents Sergio
Valdez, Angelina Valdez-Novabos, Teresita Argawanon-Mangubat and Daylinda
Argawanon-Melendres (the heirs), purchased from Feliciana Santillan, on December 9,
1935, a parcel of unregistered land covered by Tax Declaration located in Barrio
Dayhagon, Medellin, Cebu. He took possession of the property and declared it for tax
purposes in his name. Prior to the sale, however, the entire length of the land from
north to south was already traversed in the middle by railroad tracks owned by
petitioner Bogo-Medellin Milling Co., Inc. (hereafter Bomedco). The tracks were used
for hauling sugar cane from the fields to petitioners sugar mill. When Magdaleno
Valdez, Sr. passed away in 1948, herein private respondents inherited the land.
However, unknown to them, Bomedco was able to have the disputed middle lot which
was occupied by the railroad tracks placed in its name. The entire subject land was
divided into three, namely, Cadastral Lot Nos. 953,954 and 955. Lot Nos. 953 and 955
remained in the name of private respondents. However, Lot No. 954, the narrow lot
where the railroad tracks lay, was claimed by Bomedco as its own and was declared for
tax purposes in its name. Upon discovery respondents wrote a letter to Bomedco
demanding for payment of compensation for the use of the land but the same was not
heeded.
On June 8, 1989, the heirs filed a Complaint for Payment of Compensation and/or
Recovery of Possession of Real Property and Damages with Application for Restraining
Order/Preliminary Injunction.The heirs allegations:
1) That, before she sold the land to Valdez, Sr. in 1935, Santillan granted
Bomedco, in 1929, a railroad right of way for a period of 30 years.
2) When Valdez, Sr. acquired the land, he respected the grant.
3) The right of way expired sometime in 1959 but respondent heirs allowed
Bomedco to continue using the land because one of them was then an
employee of the company.
Bomedcos defense/s:
1) That it was the owner and possessor of Cadastral Lot No. 954, having bought
the same from Feliciana Santillan in 1929, prior to the sale of the property by
the latter to Magdaleno Valdez, Sr. in 1935.
2) That plaintiffs claim was already barred by prescription and laches because of
Bomedcos open and continuous possession of the property for more than 50
years.
RTC decision: rejected Bodemcos claim of ownership based on a prior sale but upheld
ownership over the parcel of land based on acquisitive prescription.
CA decision: reversed the RTC. It held that Bomedco only acquired an easement of right
of way by unopposed and continuous use of the land, but not ownership, under Article
620 of the Civil Code.
ISSUE:
WON Bodemco has acquired ownership of the land by virtue of acquisitive prescription.
RULING:
NO. Bodemco has not acquired ownership of the land by virtue of acquisitive
prescription
Under Art. 1137 of the Civil Code
Petitioners claim of ownership through extraordinary acquisitive prescription under
Article 1137 of the Civil Code cannot be sustained. There is no dispute that the
controversial strip of land has been in the continuous possession of petitioner since
1929.
But possession, to constitute the foundation of a prescriptive right, must be possession
under a claim of title, that is, it must be adverse. Unless coupled with the element of
hostility towards the true owner, possession, however long, will not confer title by
prescription.
While it is true that, together with a persons actual and adverse possession of the land,
tax declarations constitute strong evidence of ownership of the land occupied by him,
this legal precept does not apply in cases where the property is declared to be a mere
easement of right of way. An easement or servitude is a real right, constituted on the
corporeal immovable property of another, by virtue of which the owner has to refrain
from doing, or must allow someone to do, something on his property, for the benefit of
another thing or person.
It exists only when the servient and dominant estates belong to two different owners.
It gives the holder of the easement an incorporeal interest on the land but grants no
title thereto.
Therefore, an acknowledgment of the easement is an admission that the property
belongs to another. Having held the property by virtue of an easement, petitioner
cannot now assert that its occupancy since 1929 was in the concept of an owner.
Neither can it declare that the 30-year period of extraordinary acquisitive prescription
started from that year.
Petitioner, however, maintains that even if a servitude was merely imposed on the
property in its favor, its possession immediately became adverse to the owner in the
late 1950s when the grant was alleged by respondent heirs to have expired. We do not
think so. The mere expiration of the period of easement in 1959 did not convert
petitioners possession into an adverse one. Mere material possession of land is not
adverse possession as against the owner and is insufficient to vest title, unless such
possession is accompanied by the intent to possess as an owner. There should be a
hostile use of such a nature and exercised under such circumstances as to manifest and
give notice that the possession is under a claim of right.
In the absence of an express grant by the owner, or conduct by petitioner sugar mill
from which an adverse claim can be implied, its possession of the lot can only be
presumed to have continued in the same character as when it was acquired(that is, it
possessed the land only by virtue of the original grant of the easement of right of
way),or was by mere license or tolerance of the owners(respondent heirs).
It is a fundamental principle of law in this jurisdiction that acts of possessory character
executed by virtue of license or tolerance of the owner, no matter how long, do not
start the running of the period of prescription.
After the grant of easement expired in 1959, petitioner never performed any act
incompatible with the ownership of respondent heirs over Cadastral Lot No. 954.
On the contrary, until 1963, petitioner continued to declare the sugar central railroad
right of way in its realty tax receipts, thereby doubtlessly conceding the ownership of
respondent heirs. Respondents themselves were emphatic that they simply tolerated
petitioners continued use of Cadastral Lot No. 954 so as not to jeopardize the
employment of one of their co-heirs in the sugar mill of petitioner.
The only time petitioner assumed a legal position adverse to respondents was when it
filed a claim over the property in 1965 during the cadastral survey of Medellin. Since
then (1965) and until the filing of the complaint for the recovery of the subject land
before the RTC of Cebu in 1989, only 24 years had lapsed. Since the required 30-year
extraordinary prescriptive period had not yet been complied with in 1989, petitioner
never acquired ownership of the subject land.
 Lubos vs. Galupo
FACTS:
The subject of the said case is a parcel of land.
The plaintiffs claim that in a private instrument, Victoriana Dulay and her son
Restituto D. Merino sold the said property to Juan Galupo. On the death of
Juan Galupo, the same was inherited by his son Mansueto Galupo, Sr.
Mansueto Galupo, Sr. died in 1981. The plaintiffs are his children out of two
marriages.
The plaintiffs complain that they discovered the land to be occupied by the
tenant farmers of defendant Lina Abalon Lubos who sold a portion of the said
land to Alicio Poldo, married to Teresita Poldo. The plaintiffs sought the
annulment of the said sale, and a declaration that they are the lawful owners
of the land.
On the other hand, defendant Lina Abalon Lubos contends that the subject
land was originally owned by Victoriana Dulay alone, who is her great
grandmother. Victoriana Dulay sold the property to her father Juan F. Abalon.
Her father possessed the property for over thirty (30) years when he sold the
same to her. Subsequently, she sold a portion of the property to the spouses
Poldo, who claim to be purchasers in good faith.
ISSUE:
Who as between the parties have a better right or title to the subject lot?
RULING:
Article 1141, Civil Code, governs prescription of real action over immovables. It
provides:
- Real actions over immovables prescribe after thirty years.
- This provision is without prejudice to what is established for the
acquisition of ownership and other real rights by prescription.
For the purposes of prescription, there is just title when the adverse claimant
came into possession of the property through one of the modes recognized by
law for the acquisition of ownership or other real rights, but the grantor was
not the owner or could not transmit any right. On the other hand, good faith
consists in the reasonable belief that the person from whom the possessor
received the thing was its owner but could not transmit the ownership thereof.
Petitioners lack of good faith was also apparent.
Petitioner Lubos has not offered any documentary proof of the transaction
between her father and Victoriana Dulay, the original owner. What she
presented were the testimonies of the tenants who worked on the land. From
these testimonies, it would appear that Juan Abalon was in possession as early
as 1963.
The nature of Juan Abalons possession cannot be categorically determined
from the testimonies given. Tenant Jose Morillo admitted that he did not
exactly know who the owner is, while tenant Arturo Tuballas admitted that he
did not know how Juan Abalon came to possess the land.
The property was still declared in the name of Victoriana Dulay at the time that
Juan Abalon sold the land to petitioner Lubos.
Assuming that Lina Abalon and her father possessed the property in the
concept of owner, still, acquisition of ownership by prescription has not run in
their favor.
When the respondents filed the instant case, petitioner Lubos was in
possession of the property for only twenty-eight (28) years as testified to by
petitioners witnesses. This is short of the required thirty years of
uninterrupted adverse possession without just title and good faith.
The respondent Galupos, on the other hand, presented the escritura de
compra y venta which showed that the land was sold by Victoriana Dulay to
Juan Galupo. Upon Juan Galupos death, the property was inherited by his heir,
Mansueto Galupo, Sr. Likewise, respondents inherited the land from their
father upon the latters death.
Petitioner has failed to establish the chain of title through which the land
passed to her. As heretofore stated, no proof was presented to show that,
indeed, the land was transferred from its original owner, Victoriana Dulay, to
petitioners father, Juan Abalon.
In contrast, the respondents have shown that the land came to their
possession as heirs of Mansueto Galupo, Sr. who was the heir of Juan Galupo,
the person to whom Victoriana Dulay transferred the land.
 Macababbad, Jr. vs. Masirag
FACTS:
On April 28, 1999, Masirag filed with the RTC a complaint against Macababbad,
Chua and wife Say, for quieting of title, nullity of titles, reconveyance, and
damages, who cabal themselves in a mala fides of badges of fraud, dishonesty,
deceit, misrepresentations, bad faith, under the guise of purported
instrument, nomenclature extra-judicial settlement with simultaneous sale of
portion of registered land (Lot 4144) dated December 3, 1967, a falsification
defined and penalized under Art. 172 in relation to Art.171, Revised Penal
Code, by causing it to appear that persons have participated in any act or
proceeding when they did not in fact so participate.
The investigation disclosed that the Macababbads falsified a document
entitled Extra-judicial Settlement with Simultaneous Sale of Portion of
Registered Land (Lot No 4144) so that the Masirags were deprived of their
shares in Lot No. 4144. The document purportedly bore the Masirags
signatures making them appear to have participated in the execution of the
document when they did not, they did not even know the Macababbads.
The document ostensibly conveyed the subject property to Macababbad for
P1, 800.00. Macababbad registered portions of Lot No 4144 in his name and
sold other portions to third parties, one of them is Chua and wife Say.
Based on these allegations, the Masirags asked: 1) that the extrajudicial
settlement of estate and sale be declared null and void ab initio and without
force and effect, and that Chua be ordered and directed to execute the
necessary deed of conveyance of the land; if they refuse, that the clerk of court
be required to do so ; 2) issuance of a new TCT in Masirags name and the
cancellation of Macababbad and Chuas certificate of title; 3) that
Macababbads be ordered to pay damages and attorneys fees.
The Macababbads moved to dismiss the appeal on the ground that the errors
the Masirags raised involved pure questions of law that should be brought
before the Supreme Court via a Petition for Review on Certiorari under Rule
45 of the Rules of Court. While the Masirags insisted that their appeal involved
mixed questions of fact and law and thus fell within the purview of the CAs
appellate jurisdiction.
ISSUE:
Whether or not the action of the respondents has already prescribed.
RULING:
The respondents argue that their action is one for the annulment of
the extrajudicial settlement of estate and sale bearing their forged signatures.
They contend that their action had not yet prescribed because an action to
declare an instrument null and void is imprescriptible. They modified their
position and argued that the sale to the petitioners pursuant to
the extrajudicial settlement of estate and sale was void because it was carried
out through fraud; thus, the appropriate prescription period is four (4) years
from the discovery of fraud. Under this argument, respondents posit that their
cause of action had not yet prescribed because they only learned of
the extrajudicial settlement of estate and sale in March 1999; they filed their
complaint the following month.
The petitioners, on the other hand, argue that the relevant prescriptive period
here is ten (10) years from the date of the registration of title, this being an
action for reconveyance based on an implied or constructive trust.
SC believed and held that the respondents amended complaint sufficiently
pleaded a cause to declare the nullity of the extrajudicial settlement of estate
and sale, as they claimed in their amended complaint. Without prejudging the
issue of the merits of the respondents claim and on the assumption that the
petitioners already hypothetically admitted the allegations of the complaint
when they filed a motion to dismiss based on prescription, the transfer may
be null and void if indeed it is established that respondents had not given their
consent and that the deed is a forgery or is absolutely fictitious. As the nullity
of the extrajudicial settlement of estate and sale has been raised and is the
primary issue, the action to secure this result will not prescribe pursuant to
Article 1410 of the Civil Code. The respondents action is therefore
imprescriptible and the CA committed no reversible error in so ruling.
 Banco Filipino vs. CA ISSUES:
1. Whether or not the action of the private respondents has prescribed.
2. Whether or not the respondents are entitled to the refund of the alleged
FACTS: interest overpayments.
Elsa Arcilla and her husband, Calvin Arcilla, the Appellees secured, on three (3)
occasions, loans from the Banco Filipino Savings and Mortgage Bank, the RULING:
Appellant.
To secure the payment of said loans, the Appellees executed "Real Estate 1. Under Article 1150 of the Civil Code, the time for prescription of all kinds of
Mortgages" in favor of the Appellants over their parcels of land. actions, when there is no special provision which ordains otherwise, shall be
In the meantime, the Skyline Builders, Inc., through its President, Appellee counted from the day they may be brought. Thus, the period of prescription
Calvin Arcilla, secured loans from the Bank of the Philippine Islands. To insure of any cause of action is reckoned only from the date the cause of action
payment of the loan, the FGU Insurance Corporation, issued PG Bondin favor accrued. And a cause of action arises when that which should have been done
of the Bank of the Philippine Islands. Skyline Buildings, Inc., and the Appellees is not done, or that which should not have been done is done. The period
executed an "Agreement of Counter-Guaranty with Mortgage" in favor of the should not be made to retroact to the date of the execution of the contract on
FGU Insurance Corporation covering the parcels of land to assure payment of January 15, 1975 as claimed by the petitioner for at that time, there would be
any amount that the insurance company may pay on account of said loans. no way for the respondents to know of the violation of their rights. The Court
The Appellant prepared and issued a "Statement of Account" to the Appellees of Appeals therefore correctly found that respondents cause of action accrued
on their loan account to the effect that the balance of their loan account, on October 30, 1978, the date they received the statement of account showing
inclusive of interests, computed at 17% per annum. It turned out that the the increased rate of interest, for it was only from that moment that they
Appellant unilaterally increased the rate of interest on the loan account of the discovered the petitioners unilateral increase thereof.
Appellees from 12% per annum, as covenanted in the "Real Estate Mortgage" 2. As to whether the respondents are entitled to recover the alleged
and "Deed of Consolidated and Amended Real Estate Mortgage" to 17% per overpayments of interest, we find that they are despite the absence of any
annum on the authority of the Central Bank Circular. prayer therefore. This Court has ruled that it is the material allegations of fact
in the complaint, not the legal conclusion made therein or the prayer that
The Appellees failed to pay their monthly amortizations to Appellant. The
determines the relief to which the plaintiff is entitled. It is the allegations of
latter forthwith filed a petition for the extrajudicial foreclosure of Appellees
the pleading which determine the nature of the action and the Court shall
"Real Esate Mortgage" in favor of the Appellant and Appellant was the
grant relief warranted by the allegations and the proof even if no such relief is
purchaser of the property at public auction.
prayed for. Thus, even if the complaint seeks the declaration of nullity of the
In the meantime, the FGU Insurance Corporation, Inc. redeemed the aforesaid
contract, the Court of Appeals correctly ruled that the factual allegations
properties from the Appellant by paying to the latter.
contained therein ultimately seek the return of the excess interests paid.
The Appellees filed a complaint in the Court a quo for the "Annulment of the
Loan Contracts, Foreclose Sale with Prohibition and Injunction, Etc."
The Appellees averred, in their complaint, inter alia, that the loan contracts
and mortgages between the Appellees and the Appellant were null and void
because: (a) the interests, charges, etc., were deducted in advance from the
face value of the "Promissory Notes" executed by the Appellees; and (b) the
rate of interests charged by the Appellant were usurious.
In its Answer to the Complaint, the Appellant averred that the interests
charged by it on Appellees loan accounts and that the said loan contracts and
mortgages were lawful. The Appellant further averred that the Appellees
action had already prescribed.
 Solid Homes Inc. vs. Tan RULING:
There can be no debate at all on the legal postulate that the prescriptive period
for bringing action for specific performance, as here, prescribes in ten (10)
FACTS: years. This is so provided in Article 1144 of the Civil Code. What we cannot
agree on with the petitioner, and about which petitioner is in serious error, is
Petitioner Solid Homes, Inc., sold to the spouses Joe Uy and Myrna Uy a
its submission that the 10-year prescriptive period should commence either
subdivision lot which thereafter, the lot was registered in the name of the Uys.
on April 7, 1980, when petitioner originally sold the lot to spouses Uy; or in
The spouses Uy sold the same lot to herein respondents, the spouses Ancheta
February, 1985, when the respondents thereafter bought the same lot from
K. Tan and Corazon de Jesus-Tan, by reason of which the former title covering
the Uy couple. Obviously, petitioner misread Article 1144 which specifically
the lot was cancelled and replaced in respondents name.
provides that the 10-year period therein referred to commences to run only
From then on, respondents visited their property a number of times, only to
from the time the right of action accrues.
find out the sad state of development thereat. There was no infrastructure
If not on a written contract, petitioners obligation to introduce improvements
and utility systems for water, sewerage, electricity and telephone, as
on the area in question arises from law, more specifically P.D. 957, as amended
announced in the approved plans and advertisements of the subdivision.
by P.D. 1216, Section 31.
Worse, squatters occupy their lot and its surrounding areas. In short, there has
Thus, the period of prescription of any action is reckoned only from the date
been no development at all.
the cause of action accrued. And a cause of action arises when that which
Respondents demanded on petitioner to provide the needed utility systems
should have been done is not done, or that which should not have been done
and clear the area of squatters and other obstructions to enable them to start
is done. The period should not be made to retroact to the date of execution
the construction of their house thereon and to allow other lot owners in the
of the contract on January 15, 1975 as claimed by the petitioner for at that
area a full access to and peaceful possession of their respective lots,
time, there would be no way for the respondents to know of the violation of
conformably with P.D. No. 957 which requires an owner or developer of a
their rights. The Court of Appeals therefore correctly found that respondents
subdivision project to develop the same within one year from the issuance of
cause of action accrued on October 30, 1978, the date they received the
its license.
statement of account showing the increased rate of interest, for it was only
Having received no reply from petitioner, respondents filed with the Field
from that moment that they discovered the petitioners unilateral increase
Office of the Housing and Land Use Regulatory Board (HLURB) a complaint for
thereof.
specific performance and damages therein praying, inter alia, that petitioner
With the reality that in this case, respondents made their written demand
be ordered to provide the needed facilities in the premises and rid the same
upon petitioner to perform what is incumbent upon it only on December 18,
of squatters; or, in the alternative, for petitioner to replace respondents
1995, it was only from that date when the 10-year prescriptive period under
property with another lot in the same subdivision where there are facilities
Article 1144 commenced to run. And since respondents complaint for specific
and sans squatters.
performance was filed with the Field Office of the HLURB only on April 1, 1996,
or less than four (4) months after the date of their demand, petitioners
ISSUES: reliance on prescription of action is simply without any leg to stand on.

1. Whether or not respondents right to bring the instant case against petitioner
has already prescribed.
2. In the event respondents opt to rescind the contract, should petitioner pay
them merely the price they paid for the lot plus interest or the current market
value thereof?

BAUSA HEIRS OF J. DINO
FACTS:
On June 5, 1978, petitioners filed a complaint for recovery of possession of a parcel of
land covered by Transfer Certificate of Title No. 182 registered in the name of petitioner
Mary Manion Bausa. The RTC decided that in favor of the petitioners, declaring them
owners of the subject property. Juan Dino, respondents predecessor-in-interest,
appealed but it was dismissed by the Court of Appeals in a Resolution which became
final and executory. A Writ of Execution was issued however; it was not served with the
defendant. Afterwards, a Delivery of Possession was executed by the Sheriff which was
received by Private respondents but did not sign it. So then, petitioners filed a Petition
for Demolition. It was granted however it was not implemented due to the resistance
of respondents. Since the decision was not executed, a Complaint for Execution of
Decision was filed with RTC which considered it as timely filed, thereby granting such
action. On appeal, however, CA reversed the decision of RTC stating that the action has
not been timely filed. So the petitioners appealed to the Supreme Court.
ISSUE:
1) Whether or not petitioners can be denied of their right to enforce the decision
issued in their favor for the recovery of the registered property?
2) Whether or not it was correct for CA decide on the issue of ownership and the
right to recovery of possession, given that there was already a former
judgment by RTC which reached finality?
According to Article 1144 (3) of the Civil Code and Section 6, Rule 39 of the Rules
of Court, once a judgment becomes final and executory, the prevailing party can
have it executed as a matter of right by mere motion within five years from date
of entry of the judgment. If the prevailing party fails to have the decision enforced
by a motion after the lapse of five years from the date of its entry, the said
judgment is reduced to a right of action which must be enforced by the institution
of a complaint in a regular court within 10 years from the time the judgment
became final.
In the instant case, petitioners are seeking to revive the judgment rendered on
October 2, 1985 of RTC, declaring them as rightful owners of the property, and
ordering respondents to vacate the premises, and to pay rents and other damages.
The judgment became final and executory on January 28, 1987 as shown in the
Entry of Judgment. Thus, petitioners have five years therefrom to execute said
judgment by mere motion and, should they fail to do so, have ten years from said
date to revive the judgment by an independent action, which they filed on January
30, 1998. Even if the purpose of the law is to provide limitations on the
enforcement of such decision, still it was very evident that ppetitioners pursued
every available remedy to recover the subject property but failed due to the
machinations of respondents. The Motion for Execution was not served to the
defendant and the Delivery of Possession was not also executed due to the refusal
of the respondents to sign it in the first place. The writ of demolition was also not
granted because of the resistance of the respondents. Despite diligent efforts and
the final and executory nature of the Decision, petitioners have yet to regain
possession of what is legally their own. These circumstances clearly demonstrate
that the failure to execute the judgment was due to respondents refusal to follow
the several writs ordering them to vacate the premises. It would be unfair for the
Court to allow respondents to profit from their defiance of valid court orders. It
would be more in keeping with justice and equity to allow the revival of the
judgment rendered by Branch 52 of the Regional Trial Court of Sorsogon in Civil
Case No. 639. To rule otherwise would result in an absurd situation where the
rightful owner of a property would be ousted by a usurper on mere technicalities.

HELD:
(2) No, it was not correct for CA to decide on the claim of ownership and right to
(1) No. The petitioners cannot be denied of their right to execute the decision issued recovery of possession.
in their favor for the recovery of the registered property.
The Court also notes that petitioners claim of ownership and right to recovery of
possession was by virtue of a title registered in their names. The ruling of the trial court
regarding the identity of the land in question and its inclusion in the said title was duly
proven in the proceedings before it and said decision has attained finality. It should be
stressed that the issue of who has better rights of possession and ownership over the
properties has long been adjudicated by the courts and has attained finality.
 TEXON MANUFACTURING AND BETTY CHUA, petitioners, vs. GRACE ISSUE:
MILLENA AND MARILYN MILLENA, respondents. Whether or not prescription has set in?

FACTS:
HELD:
Respondents were hired by Texon Manufacturing, petitioner Company. However,
No. Both respondents actions have not yet prescribed.
Texon terminated the employment of respondent Grace Millena which she reported to
the Labor Arbiter and filed a complaint for money claims. On the same notem petitioner On Grace Millenas action filed, the applicable law is Art. 291 of the Labor Code. Records
company also terminated the service of respondent Marilyn Millena. When latter went show that it was only after petitioner company terminated her services, sometime in
to the office, she was paid a sum of money for capital and was asked to sign a blank the summer of 1995, that she decided to file with the Labor Arbiter her complaint for
piece of paper thinking that it was the receipt for the said amount. However, it turned money claim. The three (3) year prescriptive period should then be counted, not from
out that it was a resignation letter and quitclaim of her back salaries. She then filed with 1991 or 1992, but from 1995.
the Labor Arbiter because of illegal dismissal. Petitioners filed a Motion to Dismiss
which was not granted, NLRC agreeing to the decision of the Labor Arbiter. On appeal On Marilyn Millenas action filed, her complaint for illegal dismissal with prayer for the
to CA, the Court decided affirmed the NLRC Order. It stated that the three year grant of money claims and benefits is one covered by Article 1146 of the Civil Code. It
prescriptive period under Article 291 of the Labor Code, is supposedly counted from must be filed with the Labor Arbiter within four (4) years. Respondents complaint was
the time the cause of action accrued. CA said that Article 291 of the Labor Code is filed on September 11, 1995 or only three (3) days after petitioners terminated her
applicable in the case at bar insofar as respondent Marilyn Millena is concerned services on September 8, 1995.Clearly, her suit was filed on time.
because she filed the action on 1995, or 2 days after her termination, which is still
Therefore, SC affirmed the decision of NLRC and CA.
within the four (4) year prescriptive period provided for in Article 1146 of the New Civil
Code. However, Article 291 of the Labor Code is applicable insofar as private
respondent Grace Millena is concerned because she filed the action well within the
three (3) year prescriptive period provided for in Article 291 of the Labor Code.
Petitioners raised the issue in the SC.
 INTESTATE ESTATE OF FRANCISCO UBAT, deceased. JOSE L.
SORIANO vs ATANASIA UBAT DE MONTES, ET AL.,
FACTS:
On October 7, 1936, Eduardo Ubat obtained a loan of P400.00, evidenced by a
promissory note, from the Philippine National Bank and, as security for payment,
mortgaged his land. He died after having paid three installments, and his only son,
Francisco Ubat, inherited the mortgaged property. The son now borrowed from
Philippine National Bank, executing a chattel mortgage on the standing crops of his
land. He also died leaving an unpaid debt for his heirs. The children instituted a
proceeding for the summary settlement of his estate wherein the bank filed its claim.
The Court dismissed the claim of the bank and later on, a creditor of Francisco Ubat
also filed an intestate proceeding. The bank filed two claims for unpaid debt of
Francisco Ubat and Eduardo Ubat. The first claim of the bank was approved but the
second though also granted but not completely. So the bank appealed to the decision
regarding the second claim. The appellee said that the obligation of Eduardo Ubat was
divisible based on equal yearly installments as stated in the promissory note. This
means that when the fourth installement had become due and demandable the
prescriptive period of ten years already started so only the tenth installment can be
recovered by the bank which filed the action on September 1955 from October 1945
when said installment became due and payable.
ISSUE:
Whether or not the whole amount can be recovered or not because of prescription?
HELD:
No. The whole amount due cannot be recovered.
It is to be observed that the note provided that payment of the principal and the
corresponding interest shall be made in ten equal annual installments. Thereby making
it an absolute duty on the part of the debtor to pay such installments yearly. In other
words, each installment, if not paid, gave rise to a separate cause of action, which might
be the subject matter of suit by the bank. The statute of limitations consequently began
to run, as to each unpaid installment, from the date the bank could sue the debtor.
Article 1150 of the Civil Code states that "the time for the prescription for all kinds of
actions, when there is no special provision which ordains otherwise, shall be counted
from the day they may be brought." Therefore, the prescriptive period starts from the
time when the creditor may file an action and not from the time he wishes to do so.
In this case, the right of the bank to sue the debtor for the whole mortgage debt had
accrued when the fourth installment was not paid. This is because of the stipulation
that failure to pay one installment would mean all the remaining amortizations would
also become due and demandable. The bank had waived its right to sue for the entire
obligation under the acceleration clause or for any unpaid installment.
However, SC clarified that only the fourth and fifth installments according to the
schedule of amortizations are no longer collectible. So the claim beginning from sixth
installment up to the tenth can be recovered by the bank since they fall within the ten-
year prescriptive period.
 VICENTE T. TAN, VICTAN & COMPANY, INC., TRANSWORLD
INVESTMENT CORPORATION, FIRST INTERNATIONAL
INVESTMENT COMPANY, INC., FAR EAST PETROLEUM &
MINERALS CORPORATION, and PHILCONTRUST
INTERNATIONAL CORPORATION vs CA
FACTS:
A Reconveyance of Shares of Stocks was filed wherein respondent Tan sough to recover
shares of stocks owned by him and his associates in Continental Bank which he had
assigned to three corporations. He was formerly arrested by the military authorities on
the basis of criminal charges filed against him for alleged irregular transactions at
Continental Bank. Because of a possible bank run as a result of the arrests, the officers
of Continental Bank requested an emergency loan to meet pending withdrawals of
depositors.However; Commercial and Savings Bank reported that Continental Bank's
assets cannot meet its liabilities, since the latter exceeded the former by P 67.260
million. The latter was also insolvent and that its continuance in business would involve
probable loss to its depositors and creditors, which are the two grounds mandated
under Section 29 of Republic Act No. 265, otherwise known as the Central Bank Act,
justifying the closure and placing under receivership of a bank.This led to the closure of
Continental Bank.
Respondent Tan executed certain agreements transferring and assigning shares of
stocks of Continental Bank as well as other properties belonging to him and his affiliate
firms to three corps. Which are the assignees to assume liabilities and obligations of
Tan and his companies? The assignees reopened the bank under a different name which
was Interbank. After 12 years, an action had been filed for reconveyance of the said
shares of stocks.
ISSUE:
Whether or not the petitioners' action against respondent is barred by prescription?
HELD:
Yes, it has prescribed. However, SC does not accept that under Republic Act No. 265,
the action has prescribed, and that in any event, assuming that Republic Act No. 265 is
inapplicable, Article 1146 of the Civil Code is nonetheless a bar.
With respect to Republic Act No. 265, the Court notes that the statute talks of enjoining
the Monetary Board from taking charge of a bank's assets. However, the petitioners are
not asking for an injunction against the Monetary Board and the Board has since in fact
ceased from performing any act in connection with Continental Bank or its successor
bank. Art. 1146 also does not apply because the action filed was for reconveyance of
the shares of stock subject of that takeover, and not on account of any injury to the
petitioners' rights. Article 1146 speaks of "injury to the rights of the plaintiff and
"quasi-delict". As the petitioners in fact very vehemently maintain in the present
petition, the cause of action is predicated on "reconveyance of petitioners'
shareholdings in the former Continental Bank under the doctrine of constructive trust.
SC said that for movables (like shares of stocks), existence prescription are summarized
as:
1) Four years, if the possessor is in good faith;
2) Eight years in all other cases, except where the loss was due to a crime in which
case, the offender cannot acquire the movable by prescription, and an action
to recover it from him is imprescriptible.
It is evident, for purposes of the complaint in question, that the petitioners had at most
eight years within which to pursue a reconveyance, reckoned from the loss of the
shares in 1977, when the petitioner Vicente Tan executed the various agreements in
which he conveyed the same in favor of the Executive Consultants, Inc., Orobel Property
Management, Inc., and Antolum Trading Corporation.
Since the complaint was filed on January 13, 1987, ten years more or less after the
petitioners transferred the shares in question, it is clear that the petitioners have
come to court too late.
It cannot be accepted by SC the petitioners contentions that the period during which
authoritarian rule was in force had interrupted prescription and that the same began
to run only on February 25, 1986, when the Aquino government took power.It cannot
be said as a universal rule that the period from September 21, 1972 through February
25, 1986 involves a force majeure.
Therefore, petition has been denied.
 Provident Savings Bank vs Court of Appeals
FACTS:
The spouses Guarins obtained a loan from Provident Savings Bank secured by a real
estate mortgage over a parcel of land, payable on or before June 20, 1967.
The bank was placed under a receivership by the Central Bank of the Philippines.
The Guarins were informed that the mortgaged property would be sold at public
auction on December 27, 1984 but the latter requested for a recomputation of their
acccount and postponement of the foreclosure assuring the bank that they had the
intention to pay their obligation.
The Guarins received a Statement of Account showing 2 outstanding accounts. One
was account of Lorenzo Guarin, and the other was the account of L.K. Guarin
Manufacturing Co.
The Guarins stated in their letter that they were willing to pay Lorenzo Guarins
obligation so the mortgaged title would be released.
The bank, however, replied that the mortgaged title would not be released until the
account of L.K. Guarin Manufacturing Co. was paid because the mortgaged property
also served as security for the indebtedness, which was undertaken by Lorenzo Guarin
in his personal capacity and as president of the corporation.
Chua wrote the bank saying that the mortgaged property had been offered to him as
payment of the judgment he obtained against the Guarins in a civil case. He requested
the bank to the assignment and expressed his willingness to pay for the obligation of
the Guarins so that the mortgaged title could be released.
The bank replied informing Chua that his request could be granted if he would also
settle the obligation of L.K. Guarin Manufacturing Co.
Chua filed a complaint against the bank to release the real estate mortgage in his favor
arguing that the bank had already lost whatever right or action it had against the
Guarins because of prescription. He claimed that since the maortgage matured on June
20, 1967, the last day within which the bank could have foreclosed the mortgage was
on June 20, 1977.
The bank countered that it was not able to foreclose the mortgage because it was place
under a receivership from September 1972 to July 27, 1981.
ISSUE:
Whether or not the action of the bank to foreclose the mortgaged property had already
prescribed.
HELD:
No, the action of the bank to foreclose the mortgaged property had not yet prescribed.
As a general rule, the appointment of a receiver does not dissolve the corporation nor
does it interfere with the exercise of its corporate rights. This principle is applicable to
a situation where there is no restraint imposed on the corporation, unlike in the case
at bar where the bank was specifically forbidden and immobilized from doing business
in the Philippines from 1972 t0 1981.
Since the foreclosure is part of the bank's business activity, which could not have been
pursued by the receiver, then the prescriptive period was legally interrupted by fuerza
mayor in 1972 on account on the prohibition imposed by the Monetary Board against
the bank from transacting business, until the directive of the board was nullified in
1981.
The period during which the obligee was prevented by a caso fortuito from enforcing
his right is not reckoned against him (Article 1154, New Civil Code). When prescription
is interrupted, all the benefits acquired so far from the possession cease and when
prescription starts anew, it will be entirely a new one.
This concept should not be equated with suspension where the past period is included
in the computation being added to the period after prescription is resumed.
Consequently, when the closure of was set aside in 1981, the period of ten years within
which to foreclose under Article 1142 of the New Civil Code began to run again.
Therefore, the action filed in 1986 to compel the bank to release the mortgage on the
ground that the action of the bank to foreclose the mortgaged property had already
prescribed was not correct.
In addtiion, the letter of Chua requesting the bank that he be allowed to pay the loan
secured by the mortgage was synonymous to an express acknowledgment of the
obligation and that the bank still had the right to foreclose the mortgaged property,
which estopped Chua from claiming otherwise.
 Philippine National Railways vs NLRC
FACTS:
On April 16, 1973, the Court of Industrial Relations promulgated judgment in an unfair
labor practice case in favor of Caldo against the Philippine National Raliways (PNR) and
its Personnel Manager. The Court ordered PNR to reinstate Caldo and the other
complainants to their former work with full backwages from the time of their dismissal
until actual reinstatement. The judgment became final and was ordered executed by
Order dated September 4, 1974.
On December 26, 1974, the PNR Board of Directors, through a resolution,
acknowledged the company's obligation under judgment.
Caldo was paid his back salaries in full up to April 30, 1974 but he was not reinstated.
On March 31, 1986, Caldo filed with the Labor Arbiters Office a motion for
reconstitution and for an alias writ of execution. He stated that the records of his case
were among those destroyed during the fire that razed the office of the NLRC including
its Records Office. He claimed that he should be entitled to additional back wages from
May 1, 1974 up to March 13, 1986 on which latter date he allegedly made known his
non-interest to be reinstated. He also claimed that he should be granted separation
pay for 1 month of every year of service from March 16, 1960 up to April 30, 1974 since
his reinstatement seemed impossible.
PNR filed a motion to quash the alias writ of execution on the ground that the judgment
was more than 10 years old and therefore, could not and should not be enforced by a
simple motion.
Caldo argued that there was a delay in the execution of judgment because in December
1983, the records of the case were among those burned in the fire that razed the NLRC
Offices.
The Labor Arbiter held that when PNR and the board of directors of PNR acknowledged
through the resolution of its debt and obligation to Caldo, the prescription of the right
of Caldo to seek the execution of the April 16, 1973 decision was stopped.
ISSUE:
Whether or not the prescription of the right of Caldo to seek the execution of the April
16, 1973 decision was stopped by the resolution of PNR acknowledging its debt and
obligation to Caldo.
HELD:
No. The theory that the resolution of the PNR Board of Directors of December 26, 1974,
considered as a "written acknowledgment of the debt by the debtor" within the
meaning of Article 1155 of the Civil Code, did rot merely interrupt and renew the
prescription of the right to execute the judgment but caused it to stop completely,
placing it, as it were, in an indefinite state of suspended animation, is fallacious. The
effect of the interruption spoken of in Article 1155 is to renew the obligation, to make
prescription run again from the date of the interruption and not, to repeat, to cause it
to stop running altogether
In addition, the destruction by fire of the records of CIR Case No. 5414-ULP, which
allegedly occurred in December, 1983, cannot be regarded as having interrupted said
period, for it obviously did not prevent Caldo from attempting to reconstitute the
records and instituting the action before the expiry of the period of ten years from
finality of the judgment rendered therein. Hence, Article 1154, declaring that the
"period during which the obligee was prevented by a fortuitous event from enforcing
his right is not reckoned against him," is inapplicable.
 Ledesma vs Court of Appeals HELD:
No, the second action filed by the bank had not yet prescribed.

FACTS: Article 1155 of the Civil. Code provides that the 10-year prescriptive period for filing an
action on a written contract under Article 1144(1) of the Code, is interrupted by
On August 21, 1980, Rizal Commercial Banking Corporation filed a civil case against
Ledesma to enforce the terms of Trust Receipt Agreement executed by them on April (a) the filing of an action,
1, 1974 but which Ledesma had failed to comply with. (b) a written extrajudicial demand by the creditor, and
As summons could not be served on the latter, said case was dismissed without (c) a written acknowledgment of the debt by the debtor.
prejudice on March 3, 1981.
On December 2, 1988, the bank instituted another civil case against Ledesma on the
Article 1155 means that upon the cessation of the suspension of the prescriptive
same cause of action and subject matter.
period, the full period of prescription commences to run anew.
Ledesma filed a motion to dismiss on the ground of prescription but was dismissed. His
In this case, the filing of the first civil action by the bank in 1980 on the Trust Receipt
petition for review on certiorari of the said judgment was also denied.
Agreement executed in 1974 interrupted the counting of the prescriptive period. So
In this present motion for reconsideration, Ledesma contended that since the Trust after the filing of the first civil action by the bank, the 10-year prescriptive period starts
Receipt Agreement was executed in 1974, the second civil action filed by the bank in to run anew.
1988, which is beyond the 10-year prescriptive period, had already prescribed. He
Hence, the second civil action filed by the bank in 1988 had not yet prescribed.
insisted that the prescriptive period continued to run again after the first civil action
filed by the bank.

ISSUE:
Whether or not the second action filed by the bank had already prescribed.
 The Overseas Bank of Manila vs. Geraldez

FACTS:
On February 16, 1966, Valenton and Juan obtained from the bank a credit
accommodation, which was secured by a chattel mortgage.
Written extrajudicial demands dated February 9, March 1 and 27, 1968, November 13
and December 8, 1975 and February 7 and August 27, 1976 were made upon them but
they refused to pay on the ground that their obligation was assumed by a third party.
The bank alleged that the supposed assumption of obligation was made without its
consent. On October 15, 1976, the bank filed a complaint against Teodosio Valenton
and Andres A. Juan for the recovery of the sum of money.
The trial court dismissed the complaint reasoning that the bank's cause of action
accrued on February 16, 1966 (the date of the manager's check for P150,000 issued by
the bank to the Republic Bank) and as the complaint was filed on October 22, 1976 or
more than ten years from the accrual of the cause of action, the complaint was barred
by the statute of limitations.

ISSUE:
Whether the banks cause of action had already expired.

HELD:
No, the banks cause of action had not yet expired.
The lower court erred in holding that each of the demand letters suspended the
prescriptive period for one day only. The interruption of the prescriptive period by
written extrajudicial demand means that the said period would commence anew from
the receipt of the demand. That is the correct meaning of interruption as distinguished
from mere suspension or tolling of the prescriptive period.
The last extrajudicial demand was made on August 27, 1976 so the 10-year prescriptive
period will start anew. Hence, the complaint filed by the bank on October 15, 1976 was
still within the 10-year prescriptive period even if the credit accommodation was
obtained on February 16, 1966.