Solid Homes Inc v Spouses Tan

When the prescription should count

Facts:
1. In 1980, Petitioner Solid Homes sold to Sps. Uy a 1069sqm lot in their QC subdivision
project. Said lot was registered in the name of Uys and TCT was in their name
2. Afterwards, the Uys sold it to herein Respondent Sps. Tan in 1985, TCT transferred to
them subsequently.
3. Afterwards, after several visits to their property, Respondents found out the sad state of
the development of the property. There was no infrastructure or utility systems as
announced in the approved plans and advertisement of the subdivision project, and
squatters occupy the property and its surrounding areas.
4. Respondents then demanded Petitioners in a letter dated 1995, to provide the promised
developments for the project and rid their property of the squatters conformably with
PD 957
5. Petitioner did not reply, hence, in 1996, they complained before the HLURB Arbiter with
the same prayers.
a. HLURB Arbiter ruled IFO Respondents
b. Petitioner appealed to HLURB Board, but the Arbiter was affirmed.
c. Petitioner appealed to OP, but affirmed HLURB with modification that if they
cannot deliver the prayers, they should pay back the Respondents with the
purchase price plus interests
6. Both parties appealed to CA. Respondents appeal because the payment should at least
be based on fair market value and not purchase price. Petitioners appeal is for obvious
reasons, kasi natalo parin sila.
a. CA modified OP decision, payment should be based on fair market value.
7. Hence, this petition
Issue: W/N Respondents action has prescribed
Held: No.
Ratio:
Petitioners claim that the action has prescribed because more than 10 years has lapsed since the
sale in 1980 or the subsequent sale in 1985 up to the filing of the case in 1996.
SC disagrees. While it is true that Art 1144 of NCC provides that 10 years is the prescriptive
period to which an action should be brought upon, it must be counted when the cause of action
has arisen. Art 1144 says that an action must be brought within ten years upon a written
contract, upon an obligation created by law, or upon a judgment. If not on a written contract, it
must be upon an obligation created by law. According to PD 957, the developer has the
obligation to provide adequate utilities.

Citing Banco Filipino Savings v CA, a cause of action arises when that which should not have
been done is done; or that which should have been done is not done.
The elements of cause of action are (1) right of the applicant, (2) obligation of defendant to
respect such right, (3) act or omission of defendant that violates the applicants right. It is only
upon the happening of the last element that a cause of action arises.
In this case, it was only when the Respondents demanded in 1995 did the cause of action arise.
Also in SSS v Moonwalk, an obligor violates his obligation from the time the obligee demands.
Absent any demand thereto, the obligor does not incur delay. As long as he is not in delay, he
cannot be guilty of some violation of the obligees rights. As a result, the prescriptive period
does not run until demand is made.