[G.R. No. L-44616. June 29, 1985.
] The appellee cannot be said to have a cause of
MARIA U. ESPAÑOL, petitioner-
appellee, vs. THE CHAIRMAN and MEMBERS
OF THE BOARD OF ADMINISTRATORS,
PHILIPPINE VETERANS
ADMINISTRATION, respondents-appellants
Facts: Maria U. Español was the widow of the
deceased veteran German Español, who died in
the service during World War II. She applied for
monthly pension under R.A. No. 65 with the
Philippine Veterans. Her application was
approved and she received her monthly pension
and her minor children their monthly dependent's
pension. But on November 1, 1951, the Philippine
Veterans Administration (PVA), in pursuance of
its administrative policy, providing that those
beneficiaries of veterans receiving pensions from
the U.S. Veterans Administration are no longer
entitled to receive pension from the PVA,
cancelled Maria U. Español's monthly pension
and that of her then, minor children.
After more than 22 years from the date when her
monthly pension was cancelled, Maria U.
Español filed with the CFI of Manila a petition for
mandamus against PVA for the restoration and
continued payment of her monthly pension
including that of her dependents effective from
the date of cancellation. The lower court ruled in
affirmation, thus, this petition.
Issue: W/n the action to compel the
restoration of her monthly prension has
already prescribed.
Held: Yes. Article 1144 of the New Civil Code
provides that actions based on an obligation
created by law shall be brought within 10 years
from the time the right of action accrues.
However, the right of action accrues when there
exists a cause of action, which consists of 3
elements, namely: a) a right in favor of the plaintiff
by whatever means and under whatever law it
arises or is created; b) an obligation on the part
of defendant to respect such right; and c) an act
or omission on the part of such defendant
violative of the right of the plaintiff. It is only when
the last element occurs or takes place that it can
be said in law that a cause of action has arisen.
action, in compelling appellant to continue paying
her monthly pension on November 1, 1951,
because appellant's act of cancellation, being
pursuant to an administrative policy, cannot be
considered a violation of appellee's right to
receive her monthly pension.
Dispositive: Court ordered PVA to 1. PAY
APPELLEE, MARIA U. ESPAÑOL, HER
MONTHLY PENSION STARTING FROM THE
DATE OF CANCELLATION and 2. PAY
APPELLEE'S QUALIFIED MINOR CHILDREN
THEIR MONTHLY DEPENDENT'S PENSION
[G.R. No. 90365. March 18, 1991.]
VICENTE T. TAN, VICTAN & COMPANY,
INC.,TRANSWORLD INVESTMENT
CORPORATION, FIRST INTERNATIONAL
INVESTMENT COMPANY, INC.,FAR EAST
PETROLEUM & MINERALS CORPORATION,
and PHILCONTRUST INTERNATIONAL
CORPORATION, petitioners, vs. THE
HONORABLE COURT OF APPEALS
(FORMER SPECIAL FIRST
DIVISION),CENTRAL BANK OF THE
PHILIPPINES, respondents.
Facts: Vicente T. Tan sought to recover shares
of stocks owned by him and his associates in
Continental Bank. He was 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, Continental Bank
requested an emergency loan to meet pending
withdrawals of depositors. After conducting a
verification, it was reported that Continental
Bank's assets cannot meet its liabilities and that
the bank is insolvent. On the basis of the report,
petitioner ordered the closure of Continental Bank
effective June 24, 1974, however, the bank may
be allowed to reorganize under an entirely new
management subject to certain conditions
foremost of which was the infusion of fresh funds
into the bank.
While still under detention by the military,
respondent Tan executed certain agreements on
359 615 shares of stock in Continental Bank.
Tan wrote on July 5, 1977 certifying that they
have no objection to the reopening and
rehabilitation of Continental Bank under its new
name, International Corporate Bank or Interbank.
Interbank reopened in 1977 and since
then operated as a banking institution with
controlling ownership thereof changing
hands during the past decade.
On January 13, 1987, after the lapse of more than
twelve (12) years, private respondents filed the
present case of reconveyance of shares of stock.
Issues: 1) W/n the action for damages is
barred by prescription under Article 1146 of
the Civil Code
2) W/n martial law interrupted prescription
Held: 1) Yes. Since the petitioners' action was
commenced on January 13, 1987, or more than
twelve years from June 24, 1974, the date the
Central Bank ordered the closure of Continental
Bank, the same had prescribed under Article
1146 of the Civil Code.
We are hard put to say, in this regard, that the
petitioners' action is after all, imprescriptible
pursuant to the provisions of Article 1133 of the
Civil Code, governing actions to recover loss by
means of a crime. For one thing, the complaint
was not brought upon this theory. For another,
there is nothing there that suggests that the loss
of the shares was indeed made possible by a
criminal act, other than simple bad faith and
probably abuse of right.
2) No. We can not accept the petitioners'
contention 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 is true that under
Article 1154, fortuitous events have the effect of
tolling the period of prescription. However, we
cannot say, as a universal rule, that the period
from September 21, 1972 through February 25,
1986 involves a force majeure.
He was under detention; that sometime in
August, 1977, the Central Bank lodged six
criminal cases against him, along with several
others, with Military Commission No. 5 in
connection with alleged violation of the Central
Bank Act, falsification of documents, and estafa.
Under these circumstances, we can not declare
detention, or authoritarian rule for that matter, as
a fortuitous event insofar as he was concerned,
that interrupted prescription.
Dispositive: WHEREFORE, the petition is
DENIED.
[G.R. No. L-23232. June 17, 1970.]
VICENTE DIRA, plaintiff-appellant, vs. PABLO
D. TAÑEGA, defendant-appellee.
Facts: In March 1946, plaintiff and defendant
together with Francisco Pagulayan entered into a
partnership for the purpose of engaging in the
printing business; the plaintiff was designated as
President and during his incumbency as until the
expiration of the period, the defendant who was
the manager-treasurer of the partnership never
paid him his salary. The plaintiff obtained a
personal loan from Francisco Pagulayan in the
amount of P1,100.00 and he pledged his share in
the said equipments to pay the same. On June 3,
1946, Francisco Pagulayan sold his share of the
partnership to the defendant and who by virtue
thereof became 2/3 owner of the business. A
letter of demand to plaintiff asking him to settle
his account was presented, but due to his failure
to do so, he (defendant) assumed full ownership
of the business since 1947.
Appellant prayed for payment of his salaries
not only as President of the partnership but
also as editor of the Leyte-Samar Tribune
which admittedly he had not been paid from
the start. for accounting of the partnership
affairs, for payment of his alleged share in
the vital value of the printing equipment and
accessories used by the partnership, of which
he also claimed part-ownership
proportionally to his share in the partnership.
Issues: 1) W/n action to recover movables
had prescribed
2) W/n action to demand accounting had
prescribed
Held: 1) Yes. Appellee became undisputed
owner of appellant's share since 1955 or six
years before this action was filed and since
said year the allegation of trusteeship had
already lost any basis whatsoever. Under
Article 1140 of same Code, "Actions to
recover movables shall prescribe eight years
from the time the possession thereof is lost,
unless the possessor has acquired the
ownership by prescription for a less period"
or for an equal period, in which latter case,
the right to sue prescribes together with the
title.
2) Yes. Under Article 1153 of the Civil Code,
a demand for "accounting runs from the day
the persons who should render the same
ceases in their functions," which in this case
as in 1947, when the appellee began to
operate the businesses as exclusively his
own. Again, inasmuch as the longest period
in the chapter on prescription of the Civil
Code is ten years, it is evident that appellant's
action for accounting is already barred. The
same is true with the claim for rentals and
recovery of proportional ownership of the
printing equipment and accessories, as to
which, appellant's period to bring his actions
accrued also in 1947, fourteen years before
this suit was filed.
[G.R. No. 51269. November 17, 1980.]
DEVELOPMENT BANK OF THE
PHILIPPINES, petitioner, vs. SPOUSES RUFO
TOMELDAN and SOLEDAD CASTELO,
SPOUSES PEDRO TOMELDAN and
MAGDALENA CABURIAN, SPOUSES
FERNANDO GABRIANA and CATALINA
TOMELDAN, GERARDO TOMELDAN, AND
THE COURT OF FIRST INSTANCE OF
PANGASINAN, respondents.
Facts: The Development Bank of the Philippines
(DBP) loaned to the private respondents on June
23, 1963, a sum of money which they promised
to pay jointly and severally. The obligation was
secured by a real estate mortgage which was
extra-judicially foreclosed (September 15, 1967)
when the borrowers failed to pay the loan. There
was a deficiency or an unpaid balance after the
foreclosure so DBP sued the borrowers for the
deficiency on March 14, 1977.
The respondent judge issued an Order that the
cause of action of the plaintiff is covered by the
five-year prescriptive period. Also, because no
express provision covers prescription of action to
recover a sum of money, the same must,
therefore, fall under Article 1149 of the Civil Code
which provides that all other actions whose
periods are not fixed in the code or in other laws
must be brought within five years from the time
the cause of action accrues. Hence, this petition.
Issue: W/n the cause of action of DBP has
already prescribed.
Held: No. DBP's cause of action accrued on
September 16, 1967, so that when the case was
filed on March 14, 1977, less than ten years had
elapsed.
DBP‘s cause of action is governed by Art. 1144
of the Civil Code because the obligation of the
private respondents to pay the deficiency is one
created by law. That article reads:
"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."
It has been held that the mortgagee in both real
and chattel mortgages has by law the right to
claim for the deficiency resulting from the price
obtained in the sale of the property at public
auction and the outstanding obligation at the time
of the foreclosure proceedings. DBP has the right
to claim payment of the deficiency after it had
foreclosed and, correlatively, the private
respondents have the obligation created by law
to pay such deficiency. Hence, the ten-year
period provided in Art. 1144 applies to the case
at bar.
Finally, a suit for the recovery of the deficiency
after the foreclosure of a mortgage is in the nature
of a mortgage action because its purpose is
precisely to enforce the mortgage contract. Such
being the case Article 1142 of the Civil Code is
likewise applicable to the instant case. Said
provision reads: "Art. 1142. A mortgage action
prescribes after ten years."
Dispositive: WHEREFORE, the Order
dismissing Civil Case No. D-3888 is set aside and
the respondent judge is hereby ordered to
continue its trial.
[G.R. No. L-21853. February 26, 1968.]
MUNICIPALITY OF OPON (now LAPU-LAPU
CITY), ET AL., petitioners, vs. CALTEX
(PHILIPPINES) INC., respondent.
Facts: Caltex Inc., is a domestic corporation
engaged in the business of petroleum products.
For storing its imported petroleum products it has
an establishment called 'Caltex Opon Terminal'
located in the Municipality of Opon, Cebu. 'Caltex
Opon Terminal' has a tin can factory whereby
plaintiff-appellant manufactures 5-gallon tin cans
for its use in the sale and distribution of its
petroleum products. Pursuant, however, to a
service agreement dated August 1, 1946 and
entered into between plaintiff-appellant and Tide
Water Associated Oil Company, plaintiff-
appellant agreed to arrange in drum and package
factories owned and operated by it, to
manufacture, supply and/or fill cans and drums
for Tidewater, provided the latter reimburses
herein plaintiff-appellant for all cost and expense
caused thereby, plus three(3%) per cent of such
cost and expense. From 1950 to 1955, plaintiff-
appellant's tin can factory at its 'Caltex Opon
Terminal manufactured 8,037,775 tin cans, out of
which 6,883,429 were used for the sale and
distribution of its own products and 1,154,346 tin
cans were delivered to Tidewater by virtue of the
service agreement abovementioned.
Ordinance No. 9, series of 1949, of defendant-
appellee Municipality of Opon, Cebu imposes a
municipal license tax on tin factory on the basis
of its maximum annual output capacity, with a
schedule of graduated rates. Pursuant to this
ordinance, defendants-appellees levied and
collected from plaintiff-appellant license taxes
based on the production of its tin factory at its
'Caltex Opon Terminal' for the years 1950 to
1955.
Court of Appeals contended that respondent is
entitled to recover P27,900.00 representing
license taxes paid for the manufacture of tin cans
used in the sale and distribution of its own
products; and that the sum of P6,300.00,
collected as license taxes corresponding to the tin
cans respondent produced for Tidewater was
properly collectible.
Issue: W/n the respondent’s action to recover
taxes paid for the years 1951 to 1953 has also
prescribed.
Held: No. The period for prescription of action to
recover municipal license taxes is six years under
Article 1145 (2) of the Civil Code. The two-year
prescriptive period in Section 306 of the National
Internal Revenue Code relied upon by petitioners
finds no application. For, this codal provision,
"clearly refers exclusively to claims for refund of
'national internal revenue tax' erroneously or
illegally collected" and not "to a refund of 'local or
municipal license fees' illegally collected."
[G.R. No. 70615. October 28, 1986.]
VIRGILIO CALLANTA, petitioner, vs.
CARNATION PHILIPPINES, INC., and
NATIONAL LABOR RELATIONS
COMMISSION [NLRC], respondents.
Facts: Petitioner Virgilio Callanta was
employed by private respondent Carnation
Philippines, Inc. in January 1974 as a
salesman. Five years later or on June 1, 1979,
respondent Carnation filed with the Ministry
of Labor and Employment [MOLE], an
application for clearance to terminate the
employment of Virgilio Callanta on the
alleged grounds of serious misconduct and
misappropriation of company funds. His
employment with Carnation was terminated
effective June 1, 1979.
On July 5, 1982, Virgilio Callanta filed with
the MOLE a complaint for illegal dismissal
with claims for reinstatement, backwages, and
damages against respondent Carnation.
In its position paper dated October 5, 1982,
respondent Carnation put in issue the
timeliness of petitioner's complaint alleging
that the same is barred by prescription for
having been filed more than three [3] years
after the date of Callanta's dismissal pursuant
to Articles 291 and 292 of the Labor Code.
Petitioner contends that the applicable law, by
way of supplement, is Article 1146 of the New
Civil Code which provides a four [4]-year
prescriptive period for an action predicated
upon "an injury to the rights of the plaintiff"
considering that an action for illegal dismissal
is neither a "penal offense" nor a mere "money
claim".
Issue: W/n Art. 1146 shall apply
Held: Yes. It is a principle in American
jurisprudence which, undoubtedly, is well-
recognized in this jurisdiction that one's
employment, profession, trade or calling is a
"property right," and the wrongful
interference therewith is an actionable
wrong. The right is considered to be
property within the protection of a
constitutional guaranty of due process of
law. Clearly then, when one is arbitrarily
and unjustly deprived of his job or means of
livelihood, the action instituted to contest
the legality of one's dismissal from
employment constitutes, in essence, an
action predicated "upon an injury to the
rights of the plaintiff," as contemplated
under Art. 1146 of the New Civil Code,
which must be brought within four [4] years.
In the instant case, the action for illegal
dismissal was filed by petitioners on July 5,
1982, or three [3] years, one [1] month and
five [5] days after the alleged effectivity date
of his dismissal on June 1, 1979 which is well
within the four [4]-year prescriptive period
under Article 1146 of the New Civil Code
[G.R. No. 83524. October 13, 1989.]
ERNESTO KRAMER, JR. and MARTA
KRAMER, petitioners, vs. HON. COURT OF
APPEALS and TRANS-ASIA SHIPPING LINES,
INC., respondents.
Facts: On April 8, 1976, the F/B Marjolea,
a fishing boat owned by the petitioners was
had a collision with an inter-island vessel,
the M/V Asia Philippines owned by the
private respondent Trans-Asia Shipping
Lines, Inc. As a consequence of the
collision, the F/B Marjolea sank, taking with
it its fish catch.
On May 30, 1985, the petitioners instituted
a Complaint for damages against the private
respondent before RTC Pasay City.
The private respondent filed a Motion
seeking the dismissal of the Complaint on
the ground of prescription.
The petitioners argued that the running of
the prescriptive period was tolled by the
filing of the marine protest and that their
cause of action accrued only on April 29,
1982, the date when the Decision
ascertaining the negligence of the crew of
the M/V Asia Philippines had become final,
and that the four-year prescriptive period
under Article 1146 of the Civil Code should
be computed from the said date.
Issue: W/n instituting a complaint for
damages arising from quasi-delict has
prescribed
Held: Yes. The petition is devoid of merit.
Under Article 1146 of the Civil Code, an
action based upon a quasi-delict must be
instituted within four (4) years. The
prescriptive period begins from the day the
quasi-delict is committed.
“”The right of action accrues when there
exists a cause of action, which consists of 3
elements, namely: a) a right in favor of the
plaintiff by whatever means and under
whatever law it arises or is created; b) an
obligation on the part of defendant to respect
such right; and c) an act or omission on the
part of such defendant violative of the right
of the plaintiff . . . It is only when the last
element occurs or takes place that it can be
said in law that a cause of action has arisen .
. ."
From the foregoing ruling, it is clear that the
prescriptive period must be counted when
the last element occurs or takes place, that
is, the time of the commission of an act or
omission violative of the right of the
plaintiff, which is the time when the cause
of action arises.
It is therefore clear that in this action for
damages arising from the collision of two
(2) vessels the four (4) year prescriptive
period must be counted from the day of the
collision. The aggrieved party need not wait
for a determination by an administrative
body like a Board of Marine Inquiry, that the
collision was caused by the fault or
negligence of the other party before he can
file an action for damages.

COCA-COLA BOTTLERS
PHILIPPINES, INC., petitioner, vs. THE
HONORABLE COURT OF APPEALS
(Fifth Division) and MS. LYDIA
GERONIMO, respondents.
Facts: