G.R. No. 102909 September 6, 1993
SPOUSES VICENTE and LOURDES PINGOL, petitioners, vs. HON. COURT OF APPEALS and HEIRS OF FRANCISCO N. DONASCO, namely: MELINDA D. PELAYO, MARIETTA D. SINGSON, MYRNA D. CUEVAS, NATIVIDAD D. PELAYO, YOLANDA D. CACERES and MARY DONASCO, respondents.

FACTS

Petitioner Vicente Pingol owned Lot No. 3223 in Caloocan City. On February 17, 1969, he executed a “DEED OF ABSOLUTE SALE OF ONE-HALF OF (1/2) [OF] AN UNDIVIDED PORTION OF A PARCEL OF LAND” in favor of Francisco N. Donasco for P20,530.00. Donasco paid P2,000.00 as advance, with the balance payable in monthly installments over six years starting January 1970. The deed stipulated that upon partition, the vendor would get the corner lot, and the vendee would get the portion with a 15-meter frontage. The one-half portion (Lot 3223-A) was segregated, a subdivision plan was prepared and approved, and Donasco took possession and built a house. Donasco paid installments only until 1972. He died on July 13, 1984, leaving a balance of P10,161.00. His heirs remained in possession. On October 19, 1988, the heirs filed an action for Specific Performance and Damages against the Pingols, offering to pay the balance plus interest, which Vicente Pingol refused, demanding a larger amount. The Regional Trial Court dismissed the complaint, ruling the deed was a contract to sell that was deemed cancelled upon default, and the action had prescribed. The Court of Appeals reversed, ruling the deed was an absolute sale, failure to pay was not a ground for cancellation, and the action was imprescriptible as it was akin to quieting title.

ISSUE

1. Whether the document denominated as “Deed of Absolute Sale” is a contract of absolute sale or a contract to sell.
2. Whether the action for specific performance had prescribed.

RULING

1. The Supreme Court affirmed the Court of Appeals’ ruling that the document is a contract of absolute sale, not a contract to sell. The terms “SELL, CONVEY AND CONVEY by way of Absolute Sale” and the immediate segregation of the sold portion and transfer of possession to the vendee indicated the vendor’s intention to immediately transfer ownership, not to make transfer contingent upon full payment. The stipulation for installment payments did not convert it into a contract to sell.
2. The Supreme Court held that the action had not prescribed. The private respondents’ action was essentially one to quiet title, which is imprescriptible for one in possession. Since the vendee and his heirs were in continuous possession of the lot, their right to demand execution of the final deed of sale and payment of the balance did not prescribe. However, the Court modified the appellate decision by ordering that legal interest on the unpaid balance be computed from January 6, 1976 (the date the entire balance should have been paid), not from the date of the filing of the complaint. Upon payment of the balance and interest, the petitioners were ordered to deliver the title for cancellation and the issuance of new titles.