FACTS:

Floro Mercene borrowed money from the Government Service Insurance System (GSIS) in 1965 and 1968, with both loans secured by real estate mortgages on Mercene's property in Quezon City. In 2004, Mercene filed a complaint for Quieting of Title against GSIS, claiming that GSIS failed to exercise its rights as a mortgagee and that the right to foreclose had prescribed. The Regional Trial Court (RTC) granted Mercene's complaint in 2005, ordering the cancellation of the mortgages on the title. Dissatisfied, GSIS appealed to the Court of Appeals (CA), which in 2010 reversed the RTC decision, stating that prescription had not yet commenced as the cause of action had not yet arisen. Mercene then filed a motion for reconsideration, but it was denied. As a result, Mercene filed a petition for review on certiorari, challenging various issues regarding the CA's decision.

ISSUES:

1. Whether the Court of Appeals erred in considering issues not raised before the trial court;

2. Whether the Court of Appeals erred in disregarding the judicial admission allegedly made by GSIS;

3. Whether the Court of Appeals erred in ruling that the real estate mortgages had yet to prescribe.

RULING:

1. The petition has no merit.

PRINCIPLES:

• Prescription commences only upon the accrual of the cause of action, and a cause of action in a written contract accrues only when there is an actual breach or violation.

• Only ultimate facts need to be specifically denied.

• GSIS raised affirmative defense that Mercene's complaint failed to state a cause of action.