MARCELINO KIAMCO, petitioner-movant,

vs.
THE HONORABLE COURT OF APPEALS, JUANA DEGUILMO-GRAPE, QUIRINA DEGUILMO-MANINGO,
ANTONIA DEGUILMO, and JUAN DEGUILMO, respondents.

FACTS:
The original owner of the property in dispute, Faustino, is the son-in-law of the original defendant, Jose.
Faustino sold by pacto de retro the subject property to sps. Villamor. After the sale, Faustino left for
Mindanao. He returned to Cebu because the Villamor sps. needed money. However, since Faustino had
no money, he requested his father-in-law, Jose, to buy the land from the Villamors. The Villamors
allegedly sold the land in dispute to Jose in a private document of sale. Immediately thereafter, Jose
took possession of the property, introduced improvements and paid taxes thereon.

Faustino Maningo returned to Cebu and allegedly tried to forcibly take possession of the property from
his father-in-law although he did not succeed. Nevertheless, Faustino proceeded to execute a deed of
sale in favor of Kiamco. The latter allegedly knew, at the time of the sale, that Jose had already been in
possession of the disputed property for more than (20) years. (7) months after the execution of the
alleged sale, Kiamco filed a complaint for quieting of title and recovery of possession with damages
against Jose.

The trial court ruled that the deed of sale executed by the Villamors in favor of Jose is null and void; and
that he had not acquired the subject property by acquisitive prescription. On appeal the decision of the
trial court was reversed and set aside.

ISSUE:
W/N Jose acquired the property by acquisitive prescription. (YES)

HELD:
It is undisputed that after the Deed of Sale was executed, Jose immediately took possession of the
property, in dispute in the concept of an owner, exercised acts of dominion and introduced
improvements thereon, and enjoyed the fruits thereof, continuously, peacefully, and adversely for more
than twenty years. It is therefore, clear, that such adverse possession started on January 10, 1950, which
is before the effectivity of the New Civil Code (August 30, 1950). Pursuant to Art. 1116 of the New Civil
Code, which provides for transitional rules on prescription, and which reads: "Prescription already
running before the effectivity of this Code shall be governed by laws previously in force; but if since the
time this Code took effect the entire period herein required for prescription should lapse, the present
Code shall be applicable, even though by the former laws a longer period might be required," the law to
be applied is the Code of Civil Procedure (Act 190). Inasmuch as here the prescription was already
running before August 30, 1950, it follows that only ten (10) years would be required, because under the
Code of Civil Procedure, regardless of good faith or bad faith, the period for acquiring land by
prescription was only ten (10) years. It therefore follows necessarily that in 1960, Jose Deguilmo had

1
already acquired the subject property by acquisitive prescription. Thus, Kiamco should have lost the
case.

The period of ten (10) years must necessarily start from January, 1950, and not from August 1950, since
here, the prescriptive period under the old law was shorter. Had the period under the old law been
longer, it is the shorter period under the New Civil Code that should apply, but this time, the period
should commence from the date of effectivity of the New Civil Code — August 30, 1950 — in view of the
clause "but if since the time this Code took effect . . ."

With the facts obtaining in the present case, it is immaterial whether the property in dispute was
possessed by Jose Deguilmo in good or bad faith. Thus, even if the alleged Deed of Sale was void ab
initio, as claimed by petitioner, what is important is that Jose immediately took possession of the
property and continuously and adversely possessed and enjoyed it for more than twenty years. Besides,
as correctly found by the respondent court, if Faustino claims that the Deed of Sale was not authentic
and valid, why did he not disturb Jose from 1950 until 1973.

MANILA ELECTRIC COMPANY, petitioner,

vs.
THE HONORABLE INTERMEDIATE APPELLATE COURT AND ELPIDIA, FELICIDAD, ISABEL,
JOSE, EUGENIA, AQUILINA, CONSUELO AND NATIVIDAD, all surnamed LEYVA, and
EDUARDA Vda. de LEYVA, respondents.

Angara, Abello, Concepcion, Regala & Cruz for petitioner.

Sumulong Law Offices for respondents.

MEDIALDEA, J.:

This is a petition to review by way of an appeal by certiorari under Rule 45 of the Rules of Court the
decision of the Intermediate Appellate Court (now Court of Appeals), dated April 12, 1985 (p.
36, Rollo) affirming in toto the decision of the lower court, holding petitioner Manila Electric Company
("MERALCO", for brevity) liable to private respondents Elpidia, Felicidad, Isabel, Jose, Eugenia,
Aquilina, Consuelo and Natividad, all surnamed Leyva and Eduarda Vda. de Leyva ("LEYVA's", for
short) for damages and compensation, and its Resolution, dated June 28, 1985, denying petitioner's
Motion for Reconsideration.

Based on the respondent court's decision the facts of the case are as follows:

2
Nazario Crisostomo and Maria Escusar owned a parcel of land with an area of 5,216.60 square
meters, situated in Cainta, Rizal at the corner of Ortigas Avenue and the road leading to the town
center of Cainta, covered by O.C.T. 4416, issued in 1931. Upon the death of both, the property
passed on to their daughter Bibiana Crisostomo Vda. de Eladio Leyva, whose title was evidenced by
TCT 8144. Ultimately, the property was inherited by the LEYVAs who were the children of Bibiana.

Prior to the issuance of OCT 4416, in the name of Nazario Crisostomo between 1929 and 1930,
MERALCO erected thereon two transmission steel towers numbered 86 and 87, later renumbered
76 (situated in Lot 1-K which is owned in common by the LEYVAs and covered by TCT No. 297168)
and 77 (situated in Lot 2-V-6, which is also owned in-common by the LEYVAs and covered by TCT
No. 338524), (par. 3, Partial Stipulation of Facts, quoted in CA Decision, p. 39, Rollo). In 1931, when
O.C.T. 4416 was issued, no encumbrance was annotated thereon.

On August 4, 1973, the LEYVAs sued MERALCO for damages and sum of money with prayer for
attorney's fees and exemplary damages for its continued use of the LEYVAs' property, claiming that
the property became off limits because of the high voltage of electric current running in the cable
lines.

In its answer, MERALCO claimed that it had acquired a grant from the original owner of the land,
Nazario Crisostomo, for a perpetual easement of right of way for the erection and operation of the
transmission steel towers for which it had paid Crisostomo the total sum of $12.40. Moreover, even
without the grant of perpetual easement, the LEYVAs' complaint is deemed barred by prescription
and laches, because of MERALCO's open, continuous and uninterrupted enjoyment of the easement
for a period of 43 years.

MERALCO did not present any proof regarding the alleged contract/grant with Nazario Crisostomo.
Instead, it presented a deposition of a certain Leland Gardner, a retired MERALCO field auditor, who
testified on the alleged payment by MERALCO of the sum of $12.40 for the grant of right of way,
claiming thus, that in the absence of the original document, Lelands deposition must be admitted as
secondary evidence of an original document, pursuant to Sec. 4, Rule 130 of the Rules of Court.

The lower court decided in favor of the LEYVAs, as follows:

WHEREFORE, in view of the foregoing premises, this Court rules against the
defendant MERALCO and finds MERALCO LIABLE TO PLAINTIFFS as follows:

l) the total sum of Two Hundred Thousand Pesos (P200,000.00) as

temperate damages suffered by the plaintiffs for the entire period
starting the year 1930 up to 10 August 1973.

2) the amount of Six Thousand Pesos (P6,000.00 ) as annual of (sic)

yearly compensation for loss of use and deprivation of opportunity to
profit and benefit from their lands to be computed from August 11,
1973, the date of filing of the complaint and computed for the same
amount annually thereafter;

3) the legal rate of interest of all the foregoing sums in addition

thereto computed from the date of this Decision;

4) the amount of Ten Thousand Pesos (P10,000.00) as and for

attorney's fees in favor of the plaintiffs;

3
 5) the cost of suit;

In addition, the counterclaim filed by defendant MERALCO is hereby ordered

dismissed for lack of basis and merit;

Finally, there is no pronouncement as to exemplary damages against any party.

SO ORDERED (pp. 36-37, Rollo).

MERALCO appealed, assigning the following errors:

THE TRIAL COURT ERRED IN NOT HOLDING THAT APPELLANT ACQUIRED BY

TITLE AN EASEMENT OF RIGHT OF WAY OVER APPELLEES' PROPERTY.

II

ASSUMING ARGUENDO THAT APPELLANT DID NOT ACQUIRE THE EASEMENT

BY TITLE, THE TRIAL COURT ERRED IN NOT HOLDING THAT APPELLANT
ACQUIRED THE EASEMENT BY PRESCRIPTION.

III

THE TRIAL COURT ERRED IN NOT DECLARING THAT APPELLEES' CAUSE OR

CAUSES OF ACTION, IF ANY, HAVE PRESCRIBED OR HAVE BEEN BARRED BY
LACHES.

IV

THE TRIAL COURT ERRED IN AWARDING TEMPERATE DAMAGES AND

ANNUAL COMPENSATION TO APPELLEES FOR PURPORTED LOSS OF USE
AND DEPRIVATION OF OPPORTUNITY TO PROFIT AND BENEFIT FROM THEIR
LANDS.

THE TRIAL COURT ERRED IN AWARDING ATTORNEYS FEES IN FAVOR OF

APPELLANT (pp. 37-38, Rollo.)

Respondent court affirmed the decision in toto.

The only issue to be resolved in this case is whether or not MERALCO acquired a perpetual
easement of right of way, over subject property.

Respondent court has ruled out the existence of a contract to support MERALCO's claim and
consequently, its absence renders the inadmisibility of the Gardner deposition as secondary
evidence based on See. 4, Rule 130 which provides as follows:

4
 SEC. 4. Secondary evidence when original is lost or destroyed. — When the original
writing has been lost or destroyed, or cannot be introduced in court, upon proof of its
execution and loss or destruction, or unavailability, its contents may be proved by a
copy, or by a recital of its contents in some authentic document, or by the recollection
of witnesses.

We agree with respondent court. It is a rule that "before a party can be permitted to introduce
secondary evidence of the contents of a written instrument, satisfactory proof must be made of
the former existence of the instrument and this necessarily involves proof of its proper execution or
genuineness". (V. Francisco, Revised Rules of Court, Ann., Vol. VII, p. 132, 1973 Ed.).

Respondent court quotes portions of the Gardner deposition (pp. 40-42, Rollo):

8. Q: Were these grants of right of way public instruments or merely

simple statements?

A: In my judgment, they were not public documents, as it is doubtful if

they were recorded in any deeds. They were written statements (p. 2,
Answers to Cross-Interrogations).

xxx xxx xxx

81. Q: Does the defendant MERALCO still have copies of the written
grant of right of way executed by Nazario Crisostomo?

A: No more.

82. Q: Why does not defendant Meralco have any more copies?

A: All the copies of the grant were burned during the war.

83. Q: Where does Meralco usually place said copies?

A: In the files of the accounting department.

94. Q: What efforts, if any, did you exert to locate copies of this
particular grant of right of way?

A: We have exerted diligent and extensive effort. (pp. 9-10 of the

deposition)

xxx xxx xxx

40. Q: From whom did you get the date for the entries made in Exhibit
'I-D' ?

A: From the receipts signed by the owners of land granting the right
of way through the personnel of the right of way department. Such
receipts covered the money paid as shown under the heading in the
report 'amount' — all the other items covered expenses of Meralco.

5
 41. Q: When were these data given to you?

A: Sometime after the transaction to which they refer.

42. Q: Why were these datas (sic) given to you?

A: It was routine — being done at that time as part of the standard

operating procedure.

43. Q: What, if any, did you do with such data after you received it?

A: The date (sic) was sent to Manila Office which was later entered in
this report. (p. 5 of his deposition)

52. Q: Why were such amounts paid to the persons listed in Schedule
16?

A: The amounts were paid to these persons in consideration for the

grant of a right of way for the erection and maintenance of the steel
tower.

53. Q: Do you know who made payment to the persons listed in

Schedule 16?

A: The personnel of the right of way department.

54. Q: What participation, if any, did you have in making payments to

the persons listed in Schedule 16?

A: I did not personally make the payments. (pp. 6-7, Deposition) (pp.
40-42, Rollo)

The foregoing testimony does not constitute evidence of a contract much less its execution. To
quote counsel for the LEYVAs in his Comment (p. 93, Rollo):

In point of fact, there is no evidence that Nazario Crisostomo even executed the
alleged grant. Leland Gardner, in his deposition, never stated positively that there
was an alleged grant of right of way by Nazario Crisostomo. What he saw was the
receipt supposedly signed by Nazario Crisostomo for $7.50 allegedly paid for the
erection of the two towers, which receipt was secured by "someone" from the right of
way department and filed by that "someone" with the Manila office. Because of this
receipt which Leland Gardner saw in the Manila Office, he assumed that Nazario
Crisostomo executed a grant of right of way in favor of Meralco because according to
him it was standard operating procedure to require the execution of the grant of right
of way after payment of the consideration for the erection of the towers. In other
words, Leland Gardner who was not present when the receipt was signed by
someone purporting to be Nazario Crisostomo, assumed that it was truly the
signature of Nazario Crisostomo, and because of the said receipt he further assumed
that the real Nazario Crisostomo executed a grant of right of way in favor of Meralco.
It is an assumption based on another assumption ....

6
Alternatively, MERALCO claims that in the absence of a grant or contract to support its title to the
grant, it nonetheless acquired title by prescription because it had been in possession of the property
since 1930 or for over 43 years.

Again, respondent court correctly ruled that:

.... There being no evidence that the original use of the property in question by
Meralco was based upon any express grant of a fee to the said property, or of an
easement of right of way nor that it began under the assertion of a right on its part,
the presumption must be that the origin of the use was the mere tolerance or license
of Nazalio Crisostomo. Thus, in Cuaycong vs. Benedicto (37 Phil. 781, 792-793) it
was held:

It is a fundamental principle of the law in this jurisdiction concerning

the possession of real property that such possession is not affected
by acts of a possessory character which are 'merely tolerated' by the
possessor, or which are due to his license (Civil Code, Arts. 444 and
1942). This principle is applicable not only with respect to the
prescription of the dominium as a whole, but to the prescription of
right in rem. In the case of Cortes vs. Palanca Yu-Tibo (2 Phil. Rep.,
24, 38) the Court said:

The provision of Article 1942 of the Civil Code to the effect that acts
which are merely tolerated produce no effect with respect to
possession is applicable as much to the prescription of real rights as
to the prescription of the fee, it being a glaring and self-evident error
to affirm the contrary, as does the appellant in his motion papers.
Possession is the fundamental basis of the prescription. Without it no
kind of prescription is possible, not even the extraordinary.
Consequently, if acts of mere tolerance produce no effect with
respect to possession, as that article provides, in conformity with
Article 444 of the same Code, it is evident that they can produce no
effect with respect to prescription, whether ordinary or extraordinary.
This is true whether the prescriptive acquisition be of a fee or of real
rights, for the same reason holds in one and the other case; that is,
that there has been no true possession in the legal sense of the word.
(See also Ayala de Roxas vs. Maglonso, 8 Phil. Rep., 745;
Municipality of Nueva Caceres vs. Director of Lands and Roman
Catholic Bishop of Nueva Caceres, 24 Phil. Rep., 485).

Possession, under the Civil Code, to constitute the foundation of a

prescriptive right, must be possession under claim of title (en
concepto de dueño) or to use the common law equivalent of the term,
it must be adverse. Acts of a possessory character performed by one
who holds by mere tolerance of the owner are clearly not en concepto
de dueño and such possessory acts, no matter how long so
continued, do not start the running of the period of prescription.

In the case at bar, the evidence discloses that sometime after the war, plaintiffs
complained against MERALCO's use and occupancy of the premises. Subsequently,
defendant sometime in 1968 negotiated with plaintiff for the purchase of the entire lot
but the negotiation did not prosper as MERALCO suspended the negotiations on the

7
 ground that it was considering the selection of another site. Finally, plaintiff filed the
present action on August 7, 1973 after their demand for compensation was refused.
It is obvious that there can be no prescription or laches to bar plaintiffs' present
action.

xxx xxx xxx

(pp. 42-44, Rollo)

Based on the foregoing, it is clear that MERALCO never acquired any easement over the LEYVAs'
property to construct and operate the steel towers. Consequently, the LEYVAs must be
compensated and awarded temperate damages, attorney's fees and annual compensation for the
loss of use and deprivation of opportunity to profit and benefit from their lands. As respondent court
pointed out (pp. 44-45, Rollo):

In this case, there is no doubt that plaintiffs' property has been practically off-limits to
its entirety because of the danger posed by the high voltage electric current being
conducted through cable lines hanging through the steel transmission towers,
thereby prejudicing plaintiffs from reaping profits and benefits from their lands.
Aggravating the situation, plaintiffs remain as owners only to be liable to payment of
real estate taxes and other related dues and levies. Meanwhile, the MERALCO does
nothing except to reap benefits and profits in its business concern to the prejudice of
plaintiffs; or as Manresa has pined — 'to the annulment of right' of ownership of
plaintiffs. For this plaintiffs should not be without redress.

ACCORDINGLY, the petition is hereby DENIED and the decision of the respondent court is
AFFIRMED in toto with costs against petitioner.

SO ORDERED.

INOCENCIA YU DINO and her HUSBAND doing business under the trade name "CANDY CLAIRE FASHION
GARMENTS", petitioners, vs. COURT OF APPEALS and ROMAN SIO, doing business under the name
"UNIVERSAL TOY MASTER MANUFACTURING", respondents.

D E C I S I O N*

PUNO, J.:

Though people say, "better late than never", the law frowns upon those who assert their rights past the
eleventh hour. For failing to timely institute their action, the petitioners are forever barred from
claiming a sum of money from the respondent.

This is a petition for review on certiorari to annul and set aside the amended decision of the respondent
court dated January 24, 1994 reversing its April 30, 1993 decision and dismissing the plaintiff-

8
petitioners' Complaint on the ground of prescription.

The following undisputed facts gave rise to the case at bar:

Petitioners spouses Dino, doing business under the trade name "Candy Claire Fashion Garment" are
engaged in the business of manufacturing and selling shirts.[1] Respondent Sio is part owner and
general manager of a manufacturing corporation doing business under the trade name "Universal Toy
Master Manufacturing."[2]

Petitioners and respondent Sio entered into a contract whereby the latter would manufacture for the
petitioners 20,000 pieces of vinyl frogs and 20,000 pieces of vinyl mooseheads at P7.00 per piece in
accordance with the sample approved by the petitioners. These frogs and mooseheads were to be
attached to the shirts petitioners would manufacture and sell.[3]

Respondent Sio delivered in several installments the 40,000 pieces of frogs and mooseheads. The last
delivery was made on September 28, 1988. Petitioner fully paid the agreed price.[4] Subsequently,
petitioners returned to respondent 29,772 pieces of frogs and mooseheads for failing to comply with the
approved sample.[5] The return was made on different dates: the initial one on December 12, 1988
consisting of 1,720 pieces,[6] the second on January 11, 1989,[7] and the last on January 17, 1989.[8]

Petitioners then demanded from the respondent a refund of the purchase price of the returned goods in
the amount of P208,404.00. As respondent Sio refused to pay,[9] petitioners filed on July 24, 1989 an
action for collection of a sum of money in the Regional Trial Court of Manila, Branch 38.

The trial court ruled in favor of the petitioners, viz:

"WHEREFORE, judgment is hereby rendered in favor of the plaintiffs Vicente and Inocencia Dino and
against defendant Toy Master Manufacturing, Inc. ordering the latter to pay the former:

1. The amount of Two Hundred Eight Thousand Four Hundred Four (P208,404.00) Pesos with legal
interest thereon from July 5, 1989, until fully paid; and

2. The amount of Twenty Thousand (P20,000.00) Pesos as attorney's fees and the costs of this suit.

The counterclaim on the other hand is hereby dismissed for lack of merit."[10]

Respondent Sio sought recourse in the Court of Appeals. In its April 30, 1993 decision, the appellate
court affirmed the trial court decision. Respondent then filed a Motion for Reconsideration and a
Supplemental Motion for Reconsideration alleging therein that the petitioners' action for collection of
sum of money based on a breach of warranty had already prescribed. On January 24, 1994, the

9
respondent court reversed its decision and dismissed petitioners' Complaint for having been filed
beyond the prescriptive period. The amended decision read in part, viz:

"Even if there is failure to raise the affirmative defense of prescription in a motion to dismiss or in an
appropriate pleading (answer, amended or supplemental answer) and an amendment would no longer
be feasible, still prescription, if apparent on the face of the complaint may be favorably considered
(Spouses Matias B. Aznar, III, et al. vs. Hon. Juanito A. Bernad, etc., supra, G.R. 81190, May 9, 1988). The
rule in Gicano vs. Gegato (supra) was reiterated in Severo v. Court of Appeals, (G.R. No. 84051, May 19,
1989).

WHEREFORE the Motion For Reconsideration is granted. The judgment of this Court is set aside and
judgment is hereby rendered REVERSING the judgment of the trial court and dismissing plaintiff's
complaint."[11]

Hence, this petition with the following assignment of errors:

I.

The respondent Court of Appeals seriously erred in dismissing the complaint of the Petitioners on the
ground that the action had prescribed.

II.

The respondent Court of Appeals seriously erred in holding that the defense of prescription would still
be considered despite the fact that it was not raised in the answer, if apparent on the face of the
complaint.

We first determine the nature of the action filed in the trial court to resolve the issue of prescription.
Petitioners claim that the Complaint they filed in the trial court on July 24, 1989 was one for the
collection of a sum of money. Respondent contends that it was an action for breach of warranty as the
sum of money petitioners sought to collect was actually a refund of the purchase price they paid for the
alleged defective goods they bought from the respondent.

We uphold the respondent's contention.

The following provisions of the New Civil Code are apropos:

"Art. 1467. A contract for the delivery at a certain price of an article which the vendor in the ordinary
course of his business manufactures or procures for the general market, whether the same is on hand at
the time or not, is a contract of sale, but if the goods are to be manufactured specially for the customer
and upon his special order, and not for the general market, it is a contract for a piece of work."

10
"Art. 1713. By the contract for a piece of work the contractor binds himself to execute a piece of work
for the employer, in consideration of a certain price or compensation. The contractor may either employ
only his labor or skill, or also furnish the material."

As this Court ruled in Engineering & Machinery Corporation v. Court of Appeals, et al.,[12] "a contract
for a piece of work, labor and materials may be distinguished from a contract of sale by the inquiry as to
whether the thing transferred is one not in existence and which would never have existed but for the
order of the person desiring it. In such case, the contract is one for a piece of work, not a sale. On the
other hand, if the thing subject of the contract would have existed and been the subject of a sale to
some other person even if the order had not been given then the contract is one of sale."[13] The
contract between the petitioners and respondent stipulated that respondent would manufacture upon
order of the petitioners 20,000 pieces of vinyl frogs and 20,000 pieces of vinyl mooseheads according to
the samples specified and approved by the petitioners. Respondent Sio did not ordinarily manufacture
these products, but only upon order of the petitioners and at the price agreed upon.[14] Clearly, the
contract executed by and between the petitioners and the respondent was a contract for a piece of
work. At any rate, whether the agreement between the parties was one of a contract of sale or a piece
of work, the provisions on warranty of title against hidden defects in a contract of sale apply to the case
at bar, viz:

"Art. 1714. If the contractor agrees to produce the work from material furnished by him, he shall deliver
the thing produced to the employer and transfer dominion over the thing. This contract shall be
governed by the following articles as well as by the pertinent provisions on warranty of title and against
hidden defects and the payment of price in a contract of sale."

"Art. 1561. The vendor shall be responsible for warranty against the hidden defects which the thing sold
may have, should they render it unfit for the use for which it is intended, or should they diminish its
fitness for such use to such an extent that, had the vendee been aware thereof, he would not have
acquired it or would have given a lower price for it; but said vendor shall not be answerable for patent
defects or those which may be visible, or for those which are not visible if the vendee is an expert who,
by reason of his trade or profession, should have known them."

Petitioners aver that they discovered the defects in respondent's products when customers in their
(petitioners') shirt business came back to them complaining that the frog and moosehead figures
attached to the shirts they bought were torn. Petitioners allege that they did not readily see these
hidden defects upon their acceptance. A hidden defect is one which is unknown or could not have been
known to the vendee.[15] Petitioners then returned to the respondent 29,772 defective pieces of vinyl
products and demanded a refund of their purchase price in the amount of P208,404.00. Having failed to
collect this amount, they filed an action for collection of a sum of money.

Article 1567 provides for the remedies available to the vendee in case of hidden defects, viz:

11
"Art. 1567. In the cases of Articles 1561, 1562, 1564, 1565 and 1566, the vendee may elect between
withdrawing from the contract and demanding a proportionate reduction of the price, with damages in
either case."

By returning the 29,772 pieces of vinyl products to respondent and asking for a return of their purchase
price, petitioners were in effect "withdrawing from the contract" as provided in Art. 1567. The
prescriptive period for this kind of action is provided in Art. 1571 of the New Civil Code, viz:

"Art. 1571. Actions arising from the provisions of the preceding ten articles shall be barred after six
months from the delivery of the thing sold." (Emphasis supplied)

There is no dispute that respondent made the last delivery of the vinyl products to petitioners on
September 28, 1988. It is also settled that the action to recover the purchase price of the goods
petitioners returned to the respondent was filed on July 24, 1989,[16] more than nine months from the
date of last delivery. Petitioners having filed the action three months after the six-month period for filing
actions for breach of warranty against hidden defects stated in Art. 1571,[17] the appellate court
dismissed the action.

Petitioners fault the ruling on the ground that it was too late in the day for respondent to raise the
defense of prescription. The law then applicable to the case at bar, Rule 9, Sec. 2 of the Rules of Court,
provides:

"Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed
waived; except the failure to state a cause of action . . . "

Thus, they claim that since the respondent failed to raise the defense of prescription in a motion to
dismiss or in its answer, it is deemed waived and cannot be raised for the first time on appeal in a
motion for reconsideration of the appellate court's decision.

As a rule, the defense of prescription cannot be raised for the first time on appeal. Thus, we held in
Ramos v. Osorio,[18] viz:

"It is settled law in this jurisdiction that the defense of prescription is waivable, and that if it was not
raised as a defense in the trial court, it cannot be considered on appeal, the general rule being that the
appellate court is not authorized to consider and resolve any question not properly raised in the lower
court (Subido vs. Lacson, 55 O.G. 8281, 8285; Moran, Comments on the Rules of Court, Vol. I, p. 784,
1947 Edition)."

However, this is not a hard and fast rule. In Gicano v. Gegato,[19] we held:

". . .(T)rial courts have authority and discretion to dimiss an action on the ground of prescription when
the parties' pleadings or other facts on record show it to be indeed time-barred; (Francisco v. Robles,

12
Feb, 15, 1954; Sison v. McQuaid, 50 O.G. 97; Bambao v. Lednicky, Jan. 28, 1961; Cordova v. Cordova, Jan.
14, 1958; Convets, Inc. v. NDC, Feb. 28, 1958; 32 SCRA 529; Sinaon v. Sorongan, 136 SCRA 408); and it
may do so on the basis of a motion to dismiss (Sec. 1,f, Rule 16, Rules of Court), or an answer which sets
up such ground as an affirmative defense (Sec. 5, Rule 16), or even if the ground is alleged after
judgment on the merits, as in a motion for reconsideration (Ferrer v. Ericta, 84 SCRA 705); or even if the
defense has not been asserted at all, as where no statement thereof is found in the pleadings (Garcia v.
Mathis, 100 SCRA 250; PNB v. Pacific Commission House, 27 SCRA 766; Chua Lamco v. Dioso, et al., 97
Phil. 821); or where a defendant has been declared in default (PNB v. Perez, 16 SCRA 270). What is
essential only, to repeat, is that the facts demonstrating the lapse of the prescriptive period be
otherwise sufficiently and satisfactorily apparent on the record; either in the averments of the plaintiff's
complaint, or otherwise established by the evidence." (emphasis supplied)

In Aldovino, et al. v. Alunan, et al.,[20] the Court en banc reiterated the Garcia v. Mathis doctrine cited in
the Gicano case that when the plaintiff's own complaint shows clearly that the action has prescribed,
the action may be dismissed even if the defense of prescription was not invoked by the defendant.

It is apparent in the records that respondent made the last delivery of vinyl products to the petitioners
on September 28, 1988. Petitioners admit this in their Memorandum submitted to the trial court and
reiterate it in their Petition for Review.[21] It is also apparent in the Complaint that petitioners instituted
their action on July 24, 1989. The issue for resolution is whether or not the respondent Court of Appeals
could dismiss the petitioners' action if the defense of prescription was raised for the first time on appeal
but is apparent in the records.

Following the Gicano doctrine that allows dismissal of an action on the ground of prescription even after
judgment on the merits, or even if the defense was not raised at all so long as the relevant dates are
clear on the record, we rule that the action filed by the petitioners has prescribed. The dates of delivery
and institution of the action are undisputed. There are no new issues of fact arising in connection with
the question of prescription, thus carving out the case at bar as an exception from the general rule that
prescription if not impleaded in the answer is deemed waived.[22]

Even if the defense of prescription was raised for the first time on appeal in respondent's Supplemental
Motion for Reconsideration of the appellate court's decision, this does not militate against the due
process right of the petitioners. On appeal, there was no new issue of fact that arose in connection with
the question of prescription, thus it cannot be said that petitioners were not given the opportunity to
present evidence in the trial court to meet a factual issue. Equally important, petitioners had the
opportunity to oppose the defense of prescription in their Opposition to the Supplemental Motion for
Reconsideration filed in the appellate court and in their Petition for Review in this Court.

This Court's application of the Osorio and Gicano doctrines to the case at bar is confirmed and now
enshrined in Rule 9, Sec. 1 of the 1997 Rules of Civil Procedure, viz:

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"Section 1. Defense and objections not pleaded. - Defenses and objections not pleaded whether in a
motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings
that the court has no jurisdiction over the subject matter, that there is another action pending between
the same parties for the same cause, or that the action is barred by a prior judgment or by statute of
limitations, the court shall dismiss the claim." (Emphasis supplied)

WHEREFORE, the petition is DENIED and the impugned decision of the Court of Appeals dated January
24, 1994 is AFFIRMED. No costs.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Kapunan, Pardo, and Ynares-Santiago, JJ., concur.

POTENCIANO SUNGA, ET AL, petitioners,

vs.
BENITO DE GUZMAN, ET AL., respondents.

Benjamin H. Razon for petitioner.

DE CASTRO, J.:

Petitioners appeal by this petition for certiorari from the decision of the Court of Appeals * affirming, as
being in accordance with law and the evidence, the decision of the Court Of First Instance of Pampanga
the dispositive portion of which reads as follows:

WHEREFORE, this Court hereby renders judgment in favor of the plaintiffs and against the defendants
the plaintiffs absolute owners of the three-ninth portion pro-indiviso of the property in litigation and
orders the defendants to convey the said three-ninth portion pro-indiviso to the herein plaintiffs and to
render an accounting of the corresponding harvest from 1947 up to the present to deliver to the
plaintiffs whatever products or its corresponding value that may correspond to them as their
participation of the harvest during that period and to pay attorney's fees in the amount of P500.00, with
costs. (p. 52, Record on Appeal.)

As found by the Court of Appeals, the pertinent facts, quoting from its decision promulgated on January
17, 1966, are as follows:

It is undisputed that the private contract of sale (Exhibit C was signed by five (5) of the nine (9)
legitimate heirs of the spouses Juan de Guzman and Lucia Montemayor. There is also no dispute that the
property in question was a fishpond of 5,590 sq. m situated in the barrio of Sebitanan municipality of

14
Sexmoa province of Pampanga. It is also undisputed that five (5) of the heirs, namely, Gervacio, Felino
Casiano, Marcelino and Marciano, all surnamed De Guzman were the only heirs among the nine (9)
children who sold their respective shares to Feliciano Sibug, a widower, for and in consideration of
P700.00, as shown in the said deed of sales, Exhibit C, on July 1, 1947. However, the referred deed of
sale is not notarized nor registered in the Register of Deeds of Pampanga. The records also disclosed
that according to the declaration of real estate (Exh B) the said property was still registered in the name
of the father of the aforesaid plaintiffs appellees up to October 5, 1962. The records further disclosed
that the De Guzman couple died in 1935 and 1937, respectively, hence by operation of law, the nine (9)
children succeeded in the ownership of the property in question. Demands were made by plaintiffs-
appellees for the delivery of their respective shares from the defendants-appellants since 1955, but the
latter refused to comply with their Lawful (sic) demands. From the execution of the deed of sale,
defendants-appellants were in physical possession of the fishpond in question, hence an action was
instituted against the defendants on February 5,1962.

From the private deed of sale (Exhibit C) it is indisputably clear that five (5) of the heirs of the late Juan
de Guzman and Lucia Montemayor signed and four (4) other did not sign. However, three (3) co-heirs
only filed the complaint namely Benito, Emilia and Fe all surnamed De Guzman, which represents 3/9 of
the property in question which cannot be considered as sold to the defendants-appellants by any
stretch of the imagination. To claim now that the whole property in question was sold to the said
defendants-appellants is absurd.

Upon the foregoing facts, the veracity of which not being challenged, is binding upon this Court, are
predicated the legal issues raised by petitioners-appellants, which are as reflected in the errors assigned
by them against the Court of Appeals, to wit:

FIRST ASSIGNMENT OF ERROR

THE LOWER COURT ERRED IN DISREGARDING THE TESTIMONY OF BENITO DE GUZMAN REFERRING TO
HIS KNOWLEDGE OF THE POSSESSION OF THE LAND IN QUESTION BY THE DEFENDANTS-APPELLANTS
WAY BACK IN 1948.

SECOND ASSIGNMENT OF ERROR

THE LOWER COURT ERRED IN NOT TAKING INTO ACCOUNT THE TESTIMONY OF BENITO DE GUZMAN
WHICH REFERS TO HIS KNOWLEDGE AND HIS SISTERS OF THE SALE OF THE LAND IN QUESTION To
FELICIANO SIBUG IN 1948.

THIRD ASSIGNMENT OF ERROR

THE LOWER COURT ERRED IN NOT RULING THAT THE CAUSE OF ACTION PLEADED BY THE PLAINTIFFS.
APPELLEES HAS ALREADY PRESCRIBED.

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FOURTH ASSIGNMENT OF ERROR

THE LOWER COURT ERRED IN NOT RULING THAT THE APPELLANTS HAVE ACQUIRED OWNERSHIP OF THE
LAND IN QUESTION THRU ACQUISITIVE AND EXTINCTIVE PRESCRIPTION.

As may be seen from the assignments of error, petitioners rely, mainly, if not solely, on the defense of
prescription in resisting the action of respondents-appellees to recover their shares, consisting of 3/9 of
the whole fishpond, which they inherited from their parents, jointly with their other brothers and
sisters, who sold their shares in the property to the predecessor of herein petitioners-appellants.

Petitioners-appellants' claim Of prescription against respondents- appellees is made to rest on their

alleged adverse possession of the whole fishpond, dating back from 1948. In support of their allegation
Of having possessed adversely the property m question, they quoted the following testimony of Benito
de Guzman, one of the appellees:

Direct Examination

Q. Do you know what happened to this land in l948?

A. I know.

Q. What happened, will you please state to the Court?

A. Potenciano Sunga came in possession.

Q. Do you know the reasons why Potenciano Sunga took possession of this land?

A. I know.

Q. What is that, will you lease state to the Court?

A. The share of my six brothers was sold to Potenciano Sunga.

Q. Oct. 5, 1962, (pages 6 and 7, Tiglao.)

Cross Examination

Q. According to you this Document Exhibit "C" you said you came to know of this document. Can
you tell the Court when did you come to know of this document?

A. If I am not mistaken it was sold in l948.

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COURT: Answer the question.

Q. When did you come to know that document of the existence of that document?

A. It is only now that l saw this document.

Q. Mr. De Guzman you stated that in 1955 you came to know the defendant Potenciano Sunga
came in possession of the land sketched in Exhibit A, is that correct?

A. Yes, sir, it was in 1948 when he came to possession.

Q. In 1948 that was the first time you came to know that Potenciano Sunga took possession?

A. A. In 1948.

Q. How did you happen to know that Potenciano Sunga took possession of the land covered by the
sketch in Exhibit "A"?

A. I came to know it from my 6 brothers who sold their shares.

Q. They also told you how much they sold the property you have described in this sketch?

A. Yes, sir, for P700.00.

.Q. What about E and F de Guzman, if you know, did they come to know also that Potenciano Sunga
came in possession of the land?

A. Yes, sir.

Q. That was also in 1948?

A. Yes,sir. (Emphasis supplied; t.s.n., Oct. 5, 1962, pages l6, 17, 18, Tiglao ).

What is notably significant from the above-quoted testimony is that appellees, while they knew of the
possession of petitioners commencing in the year 1948, they knew of the sale only when they were told
by their brothers who sold their share. As to when the information was given to appellees, the quoted
testimony does not indicate in any positive manner. Had the information been given upon the execution
of the document, and if the sale included the whole fishpond, not only the share of the vendors, there is
no reason why appellees did not similarly sign as vendors on the private instrument of sale. What this
proves is that appellees were not definitely aware that appellant's possession extended over the whole
fishpond, including that which pertained to them as their share. In that state of their knowledge as to

17
the extent and nature of petitioners-appellant's possession, said possession cannot be said to be
adverse and open as to give rise to title by prescription in favor of petitioners-appellants.

A fishpond is not as physically or actually occupied or held in possession as a parcel of land, in that the
signs of possession in the latter are more visible, and the extent of its exercise or enjoyment, more
manifest and easily determined. Hence, the adverse nature of the possession of parcel of land is more
overt as to satisfy also the other element of proscription that the possession must be open and public. In
the case of a fishpond, owned in common, one or some of whose co-owners sell their undivided share to
another, the only way the whole fishpond, including the shares of the other co-owners may be said to
have been held in adverse possession by the vendee, as against the co-owners who did not sell is if he
harvests all the fish in the fishpond, leaving nothing for the other co-owners who did not sell their share.
This is not as easily ascertained as in the exercise of possession over a piece of land, which is relatively
quite easy to show that the possession is to the exclusion of the other co-owners by the extent of the
possession, as by actual occupation or the land is for occupancy, or the extent of the enjoyment of the
produce of said land, as when it is for cultivation or raising of products sustained by the soil. When one
harvests from a fishpond, of which he is only a part-owner, it must be assumed that his harvest is only to
the extent he is rightfully entitled to, until the contrary is positively shown, which was not done in the
present case.

Likewise, against appellants' pretension is the fact that the tax declaration (Exhibit "B") over the land has
remained up to the present in the name of the original owners. the deceased parents of respondents-
appellees. The possession of petitioners-appellants, was, therefore, not completely adverse or open, nor
was it truly in the concept of an owner, which are indispensable elements for prescription to become
legally effective as a means of acquiring real property. (Articles 1117 and 1118, Civil Code of the
Philippines; Corpuz vs. Padilla, 5 SCRA 814, 820; Agolto vs. Court of Appeals, 33 SCRA 765, 771; Cabrera
vs. Tiano 8 SCRA 542, 545; Diñoso vs. Court of Appeals, 7 SCRA 666,669; Mendoza, et al. vs. Mera 17
SCRA 788, 792; Harden vs. Harden, et al., 20 SCRA 706, 711; Seminary of San Carlos vs. Municipality of
Cebu, 19 Phil. 32, 40; Negrete vs. Court of First Instance of Marinduque, 48 SCRA 113,122-123).

The argument of petitioner-appellant that they have not been giving respondents-appellees their share
in the harvest, and by such act, they have shown repudiation of the trust which may have been created
is not quite convincing. With the undisputed fact that petitioners-appellants had promised one of the
respondents-appellees, Benito de Guzman, to pay him for his share in the land, petitioners-appellants
have manifested their continuing recognition of the right of said respondent-appellee, including his two
sisters, his corespondents-appellees herein, over their corresponding share of the fishpond, as long as
the promise was not expressly withdrawn, but has, as is apparent from the evidence, remained
subsisting and continuing, since no definite date was fixed for the promise to be fulfilled. To constitute
the failure to pay as promised as an act of repudiation of the trust, or as a manifestation of adverse
possession, there should be an uneequivocal act of refusal to make payment, or a definite reneging from
the promise. This can happen only if a date has been fixed for the fulfillment of the promise, but the
period had lapsed without the promise having been redeemed.

18
As also correctly held by the respondent Court, the promise of petitioners-appellants to pay for the
share of respondents. appellees interrupts the possession as a source of prescriptive rights. (Article
1125, Civil Code; San Carlos vs. Municipality of Cebu, 19 Phil. 32). In the case herein cited, Justice
Moreland said:

Any express or implied acknowledgment which the possessor makes with regard to the dominant rights
of the true owner, interrupts the possession held for prescriptive purposes and defeats the operation of
the law granting such rights.

In trying to refute this ruling of the Court of Appeals, petitioners-appellants cite Article 1155 of the New
Civil Code which reads:

The prescription of action is interrupted when they are filed before the Court, when there is a written
extra-judicial demand by the creditors and when there is any written acknowledgment of the debt by
the debtor,

As may easily be discerned, the cited provision has no relevance to possession as an element of
prescription, referring as it does to "prescription of action", an entirely different matter from the
"interruption of possession" for acquisitive prescriptive purposes, as held in the case of San Carlos vs.
Municipality of Cebu, supra.

As to the alleged error of the Court for not dismissing the case for the non-inclusion of indispensable
parties, appellees contend that this question was never raised in the Motion to Dismiss filed by
petitioners with the trial court (pp. 6-10, Record on Appeal), nor in their brief in the Court of Appeals,
and, therefore may not be raised, nor given consideration. for the first time in this Court. This is a valid
proposition We have to uphold. Even by virtue of express provisions of law, representative suits that
need not be joined by an parties in the same status or condition, and linked together with a common
interest, are permissible. Thus anyone of the co-owners may bring an action for ejectment (Article 487,
Civil Code), while prescription obtained by a co-proprietor or a co-owner shall benefit the others (Article
111 Civil Code). Moreover, non-joinder of parties, is not a ground to dismiss an action. (Section 11, Rule
3, Revised Rules of Court; Salazar, et al vs. Ortizano 16 SCRA 662, 666; MacLeod vs. Cohen Erichs
Corporation, 1 Federal Rules Service 306; Holmberg vs. Hannaford 1 Federal Rules Service 307; Sanchez
vs. Court of First Instance of Rizal, 40 Phil. 155, 159; De los Santos vs. Sheriff of Rizal, 64 Phil. 193, 198;
Esperanza Montes vs. Enrique S. Castro and Rosendo M. Castro, 105 Phil. 1302, 1303-1304).

With the adverse disposition of all the assignments of error of the petitioners-appellants we have to find
their petition as devoid of any merit. We find the weight of justice and equity on the side of
respondents-appellees who had not parted with their share, as their other brothers did who sold their
share with a document signed by them, but not by respondents-appellees, a strong shield against the
weak thrust of prescription as the sole defense of appellants in resisting the just claim of appellees for
the recovery of their share, prosecuting their claim as paupers. So did the Court of First Instance see the

19
position of appellees, as so also the Court of Appeals. We find no reason to make Us take a different
view.

WHEREFORE, the judgment appealed from should be, as it is hereby affirmed, and the present petition,
dismissed with costs against petitioners-appellants.

Teehankee, (Chairman), Makasiar, Fernandez, Guerrero, and Melencio Herrera, JJ., concur.

20