G.R. No. 240145 - Capueta y Ataday vs. People

The case involves a 250-square-meter property in San Juan, Metro Manila, with a one-story, two-room house constructed thereon.
The property is part of a larger parcel formerly covered by Transfer Certificate of Title No. 29457 in the name of the late Antonio D. Alvir.

Petitioners (except the minor Douglas B. Alvir) executed a deed of sale in favor of private respondent, an American citizen.
The deed of sale was for the transfer of “whatever rights and interest” the petitioners may have in the property for a total consideration of P5,000.00.
Payment terms provided:

P1,500.00 upon signing.
P1,500.00 upon settlement of the property encumbrance with the Philippine National Bank.
P2,000.00 payable from commissions earned on related transactions, with the condition that if such commissions were not obtained within two years, the balance would be payable within 30 days after that period.

A forfeiture clause was included stipulating that if the balance was not paid within the specified period, all previous payments and improvements would be forfeited in favor of the vendors.

Private respondent paid the initial amount of P3,000.00 and constructed a house on the property.
In Special Proceedings No. 3899 covering the intestate estate of Antonio B. Alvir, petitioner Catalina B. Vda. de Alvir, as administratrix, submitted a partition report that was approved on December 28, 1968.
A raffle among the heirs allocated the subject property to petitioner Douglas B. Alvir, with a new Transfer Certificate of Title No. 328543 issued in his name.

On February 12, 1973, petitioner Douglas Alvir filed a complaint for ejectment against occupants (the parents-in-law of private respondent) in the Municipal Court of San Juan.
The ejectment action was dismissed for failure to implead private respondent as a necessary party.
On March 29, 1974, private respondent filed a complaint for specific performance and damages against petitioners in the Court of First Instance (CFI) of Rizal (Civil Case No. 19159).
Petitioners, after the presentation of evidence by private respondent, opted to file a motion to dismiss instead of offering their own evidence, which was denied on December 8, 1978.
The trial court rendered a decision on August 8, 1978, ordering petitioners to pay various sums (including moral, exemplary damages, attorney’s fees, and costs) and granting petitioner Douglas Alvir an option regarding the property—either to appropriate the residential house upon payment or to sell the lot for a nominal price, with additional provisions for lease in case of inaction.

Petitioners appealed the trial court decision to the then Intermediate Appellate Court (IAC), which affirmed the trial court’s decision on September 17, 1984, with costs against petitioners.
A motion for reconsideration was subsequently filed by petitioners, with leave to submit additional evidence, but this was ultimately denied on January 25, 1988.
In the petition for review, petitioners raised several errors, notably:

Alleged violation of the constitutional prohibition on aliens acquiring or owning private agricultural (including residential) lands.
Erroneous allowance and subsequent disregard of evidence by the Court of Appeals.
A grossly erroneous interpretation of the law on prescription of actions.
A drastic change in the nature of private respondent’s cause of action from specific performance to damages, resulting in an excessive award not specifically prayed for in the complaint.

A central issue focused on whether the cause of action accrued when the deed was executed (November 1961) or when the estate issues were settled and the rights determined (post-1968).

Whether the cause of action of private respondent accrued upon full payment of the balance stipulated in the deed of sale (i.e., on July 25, 1963) or only after the rights and interests were “definitely determined” by the intestate proceedings (post-December 28, 1968).
Whether petitioners’ alleged misrepresentations, which induced private respondent to delay filing the complaint, are a valid ground for tolling the prescriptive period.
Whether the entry of evidence and subsequent procedural posture of the appellate court, including the radical change in the nature of private respondent’s cause of action from specific performance to damages, is proper and lawful.
Whether the excessive damages awarded (moral, exemplary, and additional monetary penalties) exceed what was specifically prayed for in the complaint.
Whether the appellate court misapplied or misinterpreted the provisions of Article 1144 of the Civil Code regarding the prescription of actions on written contracts.