MANUEL UY AND SONS, INC. V. VALBUECO, INC.

,
G.R. NO. 179594, SEPTEMBER 11, 2013

The Facts:

 Manuel Uy & Sons, Inc. is the registered owner of parcels of land located in Teresa,
Rizal.
 Two Conditional Deeds of Sale were executed by petitioner in favor of respondent
Valbueco second Conditional Deed of Sale
 Respondent was able to pay petitioner the amount of P275,055.55 as partial payment.
Petitioner complied with its obligation under the conditional deeds of sale.
 However, respondent suspended further payment as it was not satisfied with the
manner petitioner complied with its obligations. Petitioner sent respondent a letter
informing respondent of its intention to rescind. Respondent filed a Complaint for
specific performance and damages. Case was dismissed without prejudice for lack of
interest, as respondent's counsel failed to attend the pre-trial conference.
 Five years later, or on March 16, 2001, respondent again filed with the RTC of Manila...
for specific performance and damages, seeking to compel petitioner to accept the
balance of the purchase price for the two conditional deeds of sale and to execute the
corresponding deeds of absolute sale non-payment of the installments was due.
 Petitioner refused to receive the balance of the purchase price as the properties were
mortgaged and had to be redeemed first assured that the existing mortgages on the
properties would be discharged petitioner did not inform it (respondent) that the
mortgages on the properties were already released failed to fully eject the unlawful
occupants in the area.
 Petitioner argued that the case should be dismissed, as it was barred by prior
judgment.
 Petitioner claimed that it gave respondent a notice of notarial rescission of both
conditional deeds of sale that would take effect 30 days from receipt thereof... both
conditional deeds of sale were rescinded as of April 16, 1978; hence, respondent had
no cause of action against it.
 Respondent denied that it received the alleged notice of notarial rescission. Trial
court rendered a Decision dismissing the complaint, as petitioner had exercised its
right to rescind the contracts.
 Court of Appeals rendered a Decision, reversing and setting aside the Decision of the
trial court.
 A new one is hereby entered: REINSTATING the complaint and defendant-appellee
MANUEL UY & SONS INC. is hereby DIRECTED, pursuant to Sec. 4, R. A. No. 6552,
otherwise known as the Maceda Law, to EXECUTE and DELIVER:
 Deeds of Absolute Sale in favor of VALBUECO. Transfer Certificates of Title after
VALBUECO pays MANUEL UY & SONS, without additional interest, within thirty days
from finality of this judgment, the balance of the contract price.
 In this case, the Court of Appeals held that there was no evidence that the notice of
cancellation by notarial act was actually received by respondent
  Petitioner contends that the Court of Appeals erred in directing it to execute deeds of
absolute sale over the subject lots even if respondent admitted non-payment of the
balance of the purchase price.
 Further, petitioner contends that the action has prescribed... based on a written
contract; hence, the complaint should have been brought within 10 years from the
time the right of action accrues.
 Petitioner argues that it is evident on the face of the complaint and the two contracts
of conditional sale that the cause of action accrued in 1974; yet, the complaint for
specific performance was filed after 27 years.

Issue/s:

 Whether respondent is entitled to the relief granted by the Court of Appeals.

Held:

Two conditional deeds of sale entered into by the parties are contracts to sell, as they both
contained a stipulation that ownership of the properties shall not pass to the vendee until
after full payment of the purchase price. The Court of Appeals correctly held that R.A. No.
6552, otherwise known as the Realty Installment Buyer Act, applies to the subject contracts
to sell. R.A. No. 6552 recognizes in conditional sales of all kinds of real estate (industrial,
commercial, residential) the right of the seller to cancel the contract upon non-payment of
an installment by the buyer respondent has paid less than two years of installments;
therefore, Section 4 of R.A. No. 6552 applies.

The Court finds that respondent had been served a notice of the notarial rescission when it
was furnished with the petitioner's Answer, dated February 16, 1995, to its first Complaint
filed on November 28, 1994 with the RTC of Antipolo City. It appears that after respondent
filed its first Complaint for specific performance and damages petitioner filed an Answer and
attached thereto a copy of the written notice dated March 17, 1978 and copies of the notarial
acts. However, to reiterate, the first Complaint was dismissed without prejudice. Respondent
again filed this case for specific performance and damages, this time, with the RTC of Manila.
Petitioner filed an Answer, and alleged, among others, that the case was barred by prior
judgment.

November 28, 1994 before the RTC of Antipolo City. Respondent filed a Reply dated July 18,
2001, asserting that petitioner prayed for the dismissal of the first case filed on the ground
of improper venue agreed in the deeds of conditional sale that in case of litigation, the venue
shall be in the courts of Manila. Answer included the written notice dated March 17, 1978
and two notarial acts of rescission.

Hence, respondent is deemed to have had notice of the notarial rescission of the two
conditional deeds of sale when it received petitioner's Answer... its first complaint filed with
the RTC of Antipolo. The first complaint was filed six years earlier before this complaint was
filed.

Since respondent already received notices of the notarial rescission of the conditional deeds
of sale, together with petitioner's Answer to the first Complaint five years before it filed this
case no longer deny having received notices of the notarial rescission respondent admitted
the same when it attached the notices of notarial rescission to its Reply in this case.

Consequently, respondent is not entitled to the relief granted by the Court of Appeals.

The contention is meritorious.

petitioner raised the defense of prescription for the first time before this Court, and
respondent had the opportunity to oppose the defense of prescription
Non-fulfillment of the obligation to pay on the last due date, that is, on November 15, 1974,
would give rise to an... action by the vendor, which date of reckoning may also apply to any
action by the vendee to determine his right under R.A. No. 6... filed this case on March 16,
2001, which is clearly beyond the 10-year prescriptive period; hence, the action has...
prescribed.

WHEREFORE, the petition is GRANTED.

 Principles:

In a conditional sale, as in a contract to sell, ownership remains with the vendor and does not
pass to the vendee until full payment of the purchase price. The full payment of the purchase
price partakes of a suspensive condition, and non-fulfillment of the condition prevents the
obligation to sell from arising. To differentiate, a deed of sale is absolute when there is no
stipulation in the contract that title to the property remains with the seller until full payment
of the purchase price.

Section 1, Rule 9 of the 1997 Rules of Civil Procedure provides:

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.

 Gicano v. Gegato, the Court held:

Trial courts have authority and discretion to dismiss an action on the ground of prescription
when the parties' pleadings or other facts on record show it to be indeed time-barred and it
may do so on the basis of a motion to dismiss or an answer which sets up such ground as an...
affirmative defense or even if the ground is alleged after judgment on the merits motion for
reconsideration defense has not been asserted declared in default
What is essential only is that the facts demonstrating the lapse of the prescriptive period, be
otherwise sufficiently and satisfactorily apparent on the record.

 Dino v. Court of Appeals, the Court held:

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