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NIEVES SELERIO v. TREGIDIO B. BANCASAN

FACTS:

Nieves Selerio executed a Deed of Transfer and Waiver of Rights, Interests and Improvements over a parcel of land in favor of Tregidio Bancasan. The Deed stated that Nieves sold the property to Tregidio for P200,000, with the understanding that the remaining 50% of the total consideration would be paid only when Nieves vacates the premises on or before April 30, 1994.

However, a case for Partition, Accounting of Property Income and Attorney's Fees was filed by Jose Selerio and Cecilia Ababo against Nieves, Tregidio, and others. In a Compromise Agreement approved by the court, the parties agreed to proceed with the sale of the subject property.

Tregidio demanded Nieves to vacate the property in February 2007, but the demand was ignored. Thus, Tregidio filed a Complaint for Recovery of Possession, Damages, and Attorney's Fees against Nieves.

Nieves and her daughter-in-law, Alicia Selerio, filed their Answer to the Complaint, claiming that Nieves was forced to sign the Deed and that she did not fully understand its implications due to her health condition. They also argued that Tregidio's cause of action had already prescribed.

The Regional Trial Court (RTC) dismissed Tregidio's Complaint, ruling that it was an action for specific performance based on a written contract, which prescribed in 10 years. As the Complaint was filed after almost 13 years from the date Nieves was obliged to vacate the property, it was already barred by prescription.

On appeal, the Court of Appeals (CA) reversed the RTC's decision, holding that the action was filed within the prescriptive period. The CA considered the Deed as a contract of sale and the transfer of ownership already occurred. Thus, Tregidio's cause of action accrued on the date of Nieves' refusal to vacate the property. The CA stated that despite Nieves' extended stay, her possession was only by mere tolerance of Tregidio. Respondent's Complaint for Recovery of Possession was filed well within the prescriptive period.

Petitioners filed a Petition for Review with the Supreme Court, questioning whether Tregidio's cause of action has prescribed.

ISSUES:

  1. Whether or not a contract of sale was perfected between the parties

  2. Whether or not the action filed by the respondent has prescribed.

  3. Whether or not the complaint should be dismissed on the ground of prescription.

  4. Whether or not the Regional Trial Court (RTC) should have deferred determination of the issue of prescription until after trial.

RULING:

  1. The Court held that a contract of sale was perfected between the parties. The Court emphasized that a contract of sale is consensual in nature and is perfected by mere consent. It further noted that the actual delivery of the subject matter or payment of the price agreed upon are not necessary components to establish the existence of a valid sale, and their non-performance does not invalidate a sale that has already been perfected. However, the Court clarified that the validity of the sale in this case has not been duly proven and that the CA's statements regarding the validity of the sale and the transfer of ownership were premature. The Court also ruled that the RTC erred in dismissing the case based on prescription without ruling on the alternative defenses of fraud, undue influence, and/or mistake raised by the defendants.

  2. The action has not prescribed. The Court held that the 10-year period to enforce the Deed was interrupted when the parties executed a Compromise Agreement, which is a written acknowledgment of the petitioner's obligation to deliver ownership and/or possession of the subject property. This interruption wiped out the period that already elapsed and started a fresh prescriptive period. Therefore, the written extrajudicial demand and the subsequent filing of the Complaint were made within the prescriptive period.

  3. The Court denied the dismissal of the complaint on the ground of prescription. The Court held that the ground for dismissal was not indubitable, and thus, the RTC should have deferred determination of the issue of prescription until after trial on the merits.

  4. The Court remanded the case to the RTC for trial on the merits. The RTC was directed to resolve the dispute with immediate dispatch.

PRINCIPLES:

  • A contract of sale is consensual and is perfected by mere consent, with the meeting of the minds of the parties on the object of the contract and the price.

  • The actual delivery of the subject matter or payment of the price are not necessary components to establish the existence of a valid sale.

  • The failure to pay the price does not determine the validity of a contract of sale, but goes into the performance of the contract.

  • The purpose of an action or suit and the law to govern it, including the period of prescription, is determined by the allegations and prayer for relief in the complaint.

  • Raising an affirmative defense of prescription hypothetically admits the material allegations in the complaint, but does not dispense with the plaintiff's burden of proving the cause of action.

  • A cause of action based on a written contract accrues when the right of the plaintiff is violated.

  • The prescriptive period for an action based on a written contract is interrupted by a written acknowledgment of the debt by the debtor.

  • The issue of prescription should be determined after trial on the merits, unless the ground for dismissal is indubitable.