G.R. No. L-13246; March 30, 1960
FEDERICO CALERO, plaintiff-appellant, vs. EMILIA CARRION Y SANTA MARINA, ET AL., defendants-appellees.

FACTS

On December 20, 1956, plaintiff Federico Calero filed a complaint in the Court of First Instance of Manila. He alleged that in early 1937, he and Enrique Carrion, father of the defendants, agreed to jointly purchase a property in Plaza Santa Cruz for P250,000.00, with Carrion contributing P15,000.00 and Calero P10,000.00. To avoid complications of co-ownership, it was later agreed through Carrion’s attorney-in-fact, Santiago Carrion (also the defendants’ administrator), that the property would be purchased solely in the name of the defendants (Carrion sisters), with the obligation to pay Calero twenty percent (20%) of the net profits upon its sale. A formal contract embodying this agreement was executed on May 28, 1937. Calero claimed that since 1937, he had made several offers to the defendants to sell the property at prices offered by buyers, but they refused. He alleged the defendants had been receiving rentals from the property without giving him any share. He prayed for an accounting of profits from 1937, payment of 20% of the net proceeds, and an order for the defendants to sell the property for at least P1,455,900.00 or, alternatively, to pay him P241,180.00 representing his 20% share of the estimated profit.
The defendants moved to dismiss the complaint on grounds of failure to state a cause of action and prescription. The court ordered Calero to amend his complaint to include a prayer for the court to fix a reasonable period for the sale of the property, as the original contract did not specify a deadline. Calero filed an amended complaint on June 15, 1957, adding a paragraph stating the contract did not fix a period for the sale though one was intended, and asking the court to fix a three-month period under Article 1197 of the New Civil Code.
The defendants renewed their motion to dismiss, reiterating the grounds and arguing that prescription had set in. They contended Calero’s right of action accrued in 1937 when his first offer to sell was refused, and the 10-year prescriptive period had lapsed by the filing of the complaint in 1956. The trial court initially denied the motion but, upon reconsideration, issued an order on October 1, 1957, dismissing the complaint on the ground of prescription. The court ruled that Calero’s cause of action to have the period judicially fixed was born from the date of the agreement itself (May 28, 1937) and was barred by the Statute of Limitations as the complaint was filed almost 20 years later.

ISSUE

Whether the plaintiff’s action, primarily to have the court fix a period for the sale of the property under the 1937 agreement, had prescribed.

RULING

Yes, the action had prescribed. The Supreme Court affirmed the trial court’s order of dismissal.
The Court held that the plaintiff’s cause of action under the agreement was to have the court fix the period for the sale and, after that period, to compel performance of the obligation to sell. This right to have the period judicially fixed arises by operation of law from the moment the agreement containing an undetermined period is entered into. Extrajudicial demand is not essential for this cause of action to accrue. Since the agreement was executed on May 28, 1937, and the complaint to have the period fixed was filed on December 21, 1956 (almost 20 years later), the action was clearly barred by the Statute of Limitations. The Court noted that the plaintiff’s own allegations (paragraphs 13 and 14 of the amended complaint) stated he had requested defendants to sell the property since 1937, but they refused. Based on this theory, prescription started to run from 1937.