GR 210641; (March, 2019) (Digest)
G.R. No. 210641 March 27, 2019
DOMESTIC PETROLEUM RETAILER CORPORATION, Petitioner vs. MANILA INTERNATIONAL AIRPORT AUTHORITY, Respondent
FACTS
Petitioner Domestic Petroleum Retailer Corporation (DPRC) and respondent Manila International Airport Authority (MIAA) entered into a Contract of Lease. MIAA subsequently increased the rental rates via Resolution No. 98-30. DPRC initially protested but paid the increased rentals from December 1998. On December 1, 2004, the Supreme Court, in MIAA v. Airspan Corporation, nullified MIAA’s Resolution Nos. 98-30 and 99-11 for non-compliance with notice and hearing requirements under the Administrative Code. Consequently, in 2005, DPRC stopped paying the increased rate, reverted to the original contract rate, and demanded a refund of its overpayments totaling ₱9,593,179.87. MIAA refused, prompting DPRC to file a collection case.
The Regional Trial Court ruled in favor of DPRC, ordering MIAA to refund the full overpayment with interest. The Court of Appeals affirmed but reduced the refundable amount to ₱3,839,643.05, covering only payments made from January 9, 2003, to December 5, 2005. The CA held that payments made before January 9, 2003, were barred by prescription, having been made beyond the six-year prescriptive period for quasi-contracts.
ISSUE
Whether the Court of Appeals correctly applied the six-year prescriptive period for quasi-contracts, thereby reducing the refundable amount to DPRC.
RULING
No. The Supreme Court reversed the CA’s modification and reinstated the RTC decision. The Court held that the correct prescriptive period is ten years under Article 1144 of the Civil Code, as the action is based on a written contract—the Contract of Lease. The obligation to refund arose from MIAA’s breach of its contractual duty to charge only the stipulated rental. The increased rentals, collected under a void resolution, constituted undue payment by DPRC. This created an obligation to repay, which is a cause of action arising from the contract itself, not from a quasi-contract. Since the complaint was filed in 2008, all payments made from December 1998 were within the ten-year prescriptive period. Therefore, MIAA is liable to refund the entire overpayment of ₱9,593,179.87 with legal interest from the date of extrajudicial demand.