G.R. No. 212472, January 11, 2018
Specified Contractors & Development, Inc., and Spouses Architect Enrique O. Olonan and Cecilia R. Olonan, Petitioners vs. Jose A. Pobocan, Respondent

FACTS

Respondent Jose Pobocan, former president of petitioner corporation, filed a complaint for specific performance against petitioners. He alleged that as part of his compensation package, petitioner Architect Enrique Olonan orally agreed to give him one condominium unit for every building the company constructed. Pursuant to this, two specific units from different projects were allegedly ceded to him. Upon his retirement in March 2011, he demanded the execution of deeds of conveyance, which petitioners refused.
Petitioners filed a Motion to Dismiss, arguing the action was barred by the Statute of Frauds due to the lack of a written agreement and, alternatively, that the cause of action had prescribed. The Regional Trial Court granted the motion, agreeing the alleged oral contract was unenforceable under the Statute of Frauds. The Court of Appeals reversed, ruling the Statute of Frauds applies only to executory contracts and that allegations of partial performance (possession, payment of dues) necessitated a full trial on the merits.

ISSUE

Whether the complaint for specific performance should be dismissed on the ground of prescription.

RULING

Yes, the action had prescribed. The Supreme Court granted the petition, reversing the CA and sustaining the dismissal of the complaint, but on the ground of prescription.
The Court clarified that the nature of an action is determined by the allegations in the complaint and the relief sought. Respondent’s objective was to compel petitioners to execute deeds of conveyance pursuant to a prior oral agreement. This is a personal action, not a real action claiming ownership. Personal actions founded upon an oral contract prescribe in six years from the accrual of the right of action under Article 1145 of the Civil Code.
The accrual period commenced from the time petitioners failed to comply with their obligation. Respondent’s own demand letter, annexed to the complaint, indicated the agreements were entered into in 1994 and 1999 for the respective units. His right to demand performance arose immediately upon completion of the buildings and the alleged cession of the units. However, he filed the complaint only in November 2011, which was beyond the six-year prescriptive period from 1994, 1999, or even from the completion of the constructions. Since prescription was evident from the face of the complaint and its annexes, dismissal was proper. The Court found it unnecessary to rule on the applicability of the Statute of Frauds.