BALIWAG TRANSIT, INC. v.

CA

G.R. No. L-57493 January 7, 1987

FACTS
Two passenger bus lines with similar buses and similar routes were being operated by
firm names "Baliwag Transit' and "Baliwag Transit, Inc." (BTI) the herein petitioner. Private
respondent claiming to be an employee of both bus lines filed a petition with the Social Security
Commision on August 14, 1975 to compel BTI to remit to the Social Security private
respondent's SSS Premium contributions for the years 1958 to March, 1963 and from 1967 to
March 1971. He alleged that he was employed by petitioner from 1947 to 1971 as conductor
and later as inspector with corresponding salary increases and that petitioner deducted from his
salaries, premium contributions, but what was remitted to the SSS was only for a period
covering June, 1963 to 1966, at a much lesser amount.
ISSUE
W/N the cause of action had already prescribed.
HELD
Yes, it has already prescribed.
Article 1144(2) of the Civil Code provides that 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; and 3.Upon a judgment.
Here, the cause of action is based upon an obligation created by law. Private respondent
having allowed seventeen (17) years to elapse before filing his petition with the Social Security
System.
Therefore, petitioner has undoubtedly slept on his rights and his cause of action has
already prescribed.
 TOLENTINO v CA and DAVID

G.R. No. L-41427 June 10, 1988

FACTS
Petitioner is the present legal wife of Arturo Tolentino, while Respondent Consuelo David
was legally married to Arturo Tolentino on February 8, 1931. The marriage was dissolved and
terminated pursuant to the law during the Japanese occupation by a decree of absolute divorce
granted by the Court of First Instance of Manila on the ground of desertion and abandonment
by the wife.Thereafter, Arturo Tolentino married a certain Pilar Adorable, who however, died
soon after their marriage. Tolentino subsequently married Constancia. Consuelo David, on the
other hand, continued using the surname Tolentino after the divorce and up to the time of the
filing of this complaint.

ISSUE

W/N the petitioner’s cause of action has already prescribed

HELD

Yes, it has already prescribed.

The Civil Code provides that the period of prescription should be four (4) years on an
action based on a quasi-delict.
Here, whatever the period is, it cannot be denied that the action has long prescribed
whether the cause accrued on April 21, 1945 when the petitioner and Arturo Tolentino got
married, or on August 30, 1950, when the present Civil Code took effect, or in 1951 when
Constancia Tolentino came to know of the fact that Consuelo David was still using the surname
Tolentino. It is the legal possibility of bringing the action, which determines the starting point
for the computation of the period of prescription. The petitioner should have brought legal
action immediately against the private respondent after she gained knowledge of the use by the
private respondent of the surname of her former husband. As it is, action was brought only on
November 23, 1971 with only verbal demands in between and an action to reconstitute the
divorce case. The petitioner should have filed her complaint at once when it became evident
that the private respondent would not accede to her demands instead of waiting for twenty
(20) years.
Therefore, the petitioner’s cause of action is barred by prescription.
 LUZON SURETY COMPANY, INC. v. IAC

G.R. No. 72645 June 30, 1987

FACTS

In Civil Case No. 59506 of the Court of First Instance of Manila, entitled "Luzon Surety
Co., Inc., v. Material Distributors (Phil.), Inc., et al.," judgment was rendered against the
defendants, including Gil Puyat, for the principal sum of P20,000.00 with interest at the rate of
12% computed and compounded quarterly from June 25, 1958, and the further sum of
P3,608.00 representing premiums and stamps. The judgment became final on April 13, 1967,
but was not enforced. However, Gil Puyat died and there was a claim against his estate that
was filed but his administrators oppose the claim for the reason that it is unenforceable and
barred by laches for no steps were taken by the claimant to secure a writ of execution against
defendant Gil Puyat during his lifetime to enforce the judgment. The RTC dismissed the case
which was affirmed by the Intermediate Appellate Court. The prescription of cause of action
which was raised as an issue for the case at bar for the execution of the final judgment.

ISSUE
W/N the petitioners’ cause of action has prescribed.
HELD
Yes, the cause of action has already prescribed.
Pursuant to Article 1144(3) of the New Civil Code, ten-year prescriptive period to file an
action to enforce a judgment commences to run from the finality of the original judgment or
from the revived judgment. The general rule is that prescription if not impleaded in the answer
is deemed waived.
Here, there is failure of the private respondents to raise prescription in their "Comment
to Claim." However, it does not imply the waiver of such defense. In the instant case, there is
no new issue of fact that arises in connection with the question of prescription. All the pertinent
dates showing that the petitioner's enforcement of the judgment has already prescribed can be
found in the petitioner's allegations in the "claim" as well as its evidence. This removes the case
from the general rule that prescription if not impleaded in the answer is deemed waived.
Therefore, the cause of action is barred by prescription.
 DOLE v. MARITIME COMPANY OF THE PHILIPPINES

G.R. No. L-61352 February 27, 1987

FACTS
The cargo subject of the instant case was discharged in Dadiangas unto the custody of the
consignee. The corresponding claim for damages sustained by the cargo was filed by the
petitioner with the respondent vessel. The petitioner brought an action with three (3) causes of
action involving three separate and different shipments. The third cause is the main issue of the
case. The RTC dismissed the complaint since there was already settlement and compromise
happened but the third issue is not part of the compromise or settlement. The petitioner
instituted the present complaint and the RTC granted moved for preliminary hearing but the
respondent filed a motion to dismiss on the ground of prescription. The RTC dismissed the
complaint and denied the motion for reconsideration filed by petitioner.
ISSUE
W/N the petitioner cause of action had already prescribed.
RULING
Yes, it has already prescribed.
Here, no different result would obtain even if the Court were to accept the proposition
that a written extrajudicial demand does toll prescription under the Carriage of Goods by Sea
Act. The demand in this instance would be the claim for damage-filed by Dole with Maritime.
The effect of that demand would have been to renew the one- year prescriptive period from the
date of its making. Unfortunately, Dole let the new period lapse without filing action. It
instituted an action for the new civil case more than one month after that period has expired
and its right of action had prescribed. Well within the one-year prescriptive period in Sec. 3(6)
of the Carriage of Goods by Sea Act." equates tolling with indefinite suspension. It is clearly
fallacious and merits no consideration.
Hence, the cause of action is barred by prescription.
 BUCCAT v. DISPO

G.R. No. L-44338 April 15, 1988

FACTS

The petitioner Rosario Buccat and respondent Librada Dispo entered into a contract of
lease, the expiration date of which was August 31, 1967, over the former's 542-square meter
lot situated at Bo. Catbangen, San Fernando, La Union. By virtue of the said contract, the
respondent constructed the National Business Institute, a small vocational school on the parcel
of land subject of the lease agreement. Afterwards, nine years before the expiration of the
contract, the parties entered into another lease agreement over the same parcel of land
substantially modifying the duration of the lease that the lease contract shall remain in full force
and effect as long as the land will serve the purpose for which it is intended as a school site of
the National Business Institute but the rentals now stipulated shall be subject to review every
after ten (10) years by mutual agreement of the parties. 

ISSUE

W/N the present action has prescribed

HELD

Yes.

It is necessary to first determine when the right of action for the fixing of the period of
lease accrued. This is as it should be because prior to that, the validity of the second contract of
lease was being challenged. The case for unlawful detainer filed by the petitioner became in
fact a case questioning the validity of the second contract on the grounds that the said contract
was simulated and that there was no consideration. The petitioner could not have been
expected to file an action for the fixing of the period of the lease before the Court of Appeals
promulgated its decision because she was not yet aware that the said paragraph of the second
contract was a provision that called for an indefinite period. For the reason that the very
existence, and subsequently, the interpretation of the second contract of lease, particularly par.
3 thereof, were put in issue in the unlawful detainer case, the court trying the case was
required to interpret the provisions of, and consequently, rule on the validity of the said
contract.

Therefore, the remedy or the cause of action for the filing of a case for the fixing of a
period in the contract only accrued when the court finally declared the second contract valid but
that the provision as to the period was indefinite and hence, an action for the fixing of the
period of the contract had to be filed.
 PCDP v. IAC

G.R. No. 73198. September 2, 1992

FACTS

Davao Timber Corporation (DATICOR), and the Private Development Corporation (PDCP)
entered into a loan agreement 3 whereby PDCP extended to DATICOR a loan in foreign
currency for the purpose of establishing a kiln drying and woodworking plant in Mati, Davao
Oriental. It was stipulated in the loan agreement that the foreign currency loan was to be paid
with an interest rate commencing on the several dates on which disbursements of the proceeds
of the loans were made.

DATICOR likewise executed a Deed of Chattel Mortgage 8 on the machineries and equipments
attached to the land in Davao Oriental as added security for said loans. PDCP asked DATICOR
to pay a service fee of one (1%) per cent per annum on the outstanding balance of the peso
loan to cover the cost of administering DATICOR’s account and supervision of the project. PDCP
initiated extra-judicial foreclosure proceedings 12 against the parcel of land owned by Del
Rosario in Manila and the five (5) parcels of land owned by DATICOR in Davao Oriental.
DATICOR filed case in the Court of First Instance of Davao Oriental seeking a writ of injunction
to prevent PDCP from foreclosing its properties in Davao, and likewise praying for the
annulment of the loan contract as it is in violation of the Usury Law and damages. They
rendered decision dismissing the complaint. However, the Intermediate Appellate Court
reversed the decision and rendered that the loan agreement is declaring void and no effect of
stipulations of interest.

ISSUE
W/N the cause of action had prescribed
HELD
No.
According to Article 1957 of the Civil Code, contracts and stipulations, under any cloak
or device whatever, intended to circumvent the law against usury shall be void. Furthermore,
Article 1410 provides that the action or defense for the declaration of the inexistence of a
contract does not prescribe."

Here, the usurious stipulations are void.

Therefore, any action to annul such usurious stipulations does not prescribe.
 MATAAS NA LUPA TENANTS ASSOCIATION V. DIMAYUGA
GR NO. L-32049, JUNE 25, 1984
FACTS
Petitioners filed a complaint for the exercise of preferential rights with the then Court of First
Instance of Manila, Branch IV alleging that the Contract of Sale executed by Juliana Diez Vda.
De Gabriel with Carlos Dimayuga is expressly prohibited by law as it is mandated for the
respondent to execute such sale to petitioners. Therefore said contract should be declared null
and void. The lower court ruled in favor of the respondents, ordering the dismissal of the case
on the ground that petitioners failed to state a cause of action. Thus, petitioners resorted to the
petition of certiorari for the review of the said order before the SC.
ISSUE
W/N the contract of sale is null and void
HELD
Yes.
The R.A. 1162 as amended by R.A. 2342 and 3516 sets forth that a parcel of land in
Manila and suburbs, with at least fifty (50) houses of tenants erected thereon and actually
leased to said tenants for at least ten (10) years prior to June 20, 1959, may not be sold by the
landowner to any person other than such tenants, unless the latter renounced their rights in a
public instrument.
Here, the following conditions that of offering first the sale of the land to petitioners
and the latter's renunciation in a public instrument-were not met when the land
was sold to respondent Dimayuga.
Therefore, said sale is illegal and therefore void.
 PENGSON v. CA
GR No. L-65622, June 29, 1984
FACTS
The defendant Pacific Merchandising Corporation is the owner of shares in the
Aluminum Products (Alpro) to the extent of 96% of its capital (share) holdings. PMC was
indebted to defendant Reynolds Philippines Corporation, in the sum of more than P800,000.00,
because of which indebtedness its shares in the Alpro were pledged with Reynolds as a
collateral of its loan. Because PMC needed some money, it decided to sell its shares with the
Alpro to the herein plaintiff Leonides C. Pengson', the deed of sale being evidenced by Exhibit
A. Among other things, the plaintiff assumed the obligation of PMC to Reynolds, which amount
however was reduced from more than P800,000.00 to only P500,000.00. Since the certificates
covering the shares were then held by Reynolds in pledge as security for PMC obligation, the
former's consent to the sale with assumption had to be obtained. As a security for the payment
to Reynolds of the aforesaid P500,000.00 in five (5) annual installments, the first installment
being P125,000.00. Pengson mortgaged to Reynolds a parcel of land. While Pengson paid the
first installment in the sum of P125,000.00 in three (3) installments and a bit late, the next in
installments which fell due were not paid for in spite of demands. Consequently, Reynolds
foreclosed by considering all unpaid installments due and demandable.
ISSUE
W/N Reynolds Phil. Corporation is entitled to surrender the said certificates of stocks to
Leonidas Pengson
HELD
No. Reynolds was not a party to the contract of sale between PMC and the herein
plaintiff. This being so, it had no obligation whatsoever on the strength of the contract in favor
of the plaintiff, by the terms of the contract. However, since plaintiff undertook to pay PMC’s
obligation to Reynolds, plaintiff was under obligation with the PMC on account of the said
undertaking. Otherwise, there is absolutely no reciprocal obligation between the herein plaintiff
and the appellant Reynolds. Otherwise said, the new debtor of Reynolds was the plaintiff and
no longer PMC To argue now, as the plaintiff contends, that Reynolds was under an obligation
to return the certificates of stocks pledged to it by PMC is to put the plaintiff in a better footing
than PMC was with Reynolds. There is absolutely no agreement by Reynolds to that effect in
the consent it gave to the sale by PMC of the said shares in favor of the plaintiff.