Spouses Vicente and Lourdes Pingol vs.

Court of Appeals and Heirs of Francisco Donasco

(Melinda D. Pelayo, Marietta D. Singson, Myrna D. Cuevas, Natividad D. Pelayo, Yolanda D.
Caceres, and Mary Donasco)
G.R. No. 102909, 6 September 1993
Ponente: Justice Hilario Davide, Jr.
Facts
The petitioners Vicente and Lourdes Pingol own Lot 3223 in J. De Jesus Street and Malolos Avenue,
Brgy. Bagong Barrio, Caloocan City with area of 549 sq.m. and registered under TCT 7435. On 17
February 1969, Vicente sold to Francisco Donasco through an absolute deed of sale acknowledged
before a notary public one-half () portion of that land. Donasco paid PhP2,000 to Vicente in
pursuance to the contract, thus the disputed one-half portion (designated as Lot 3223-A, in J. De Jesus
Street) was segregated from the mother lot. The Pingols retained the portion fronting J. De Jesus and
Malolos Avenue. Meanwhile, Donasco took possession of the lot immediately and constructed a house
in it. He started paying the monthly installments from 1970 until 1972 only. Francisco Donasco died on
13 July 1984 where he left a balance of PhP10,161 on the lot's contract price aside from the PhP2,000
advance payment and the PhP8, 369 monthly installment payments.
Lot 3223-A remained in possession of Francisco's heirs and they filed on 19 October 1988 before the
RTC Caloocan (later raffled to RTC Br. 125) an action for specific performance with damages and writ
of preliminary injunction, asking the trial court to order the Pingols to accept their offer for payment of
the PhP10,161 balance plus the contract's stipulated legal interest, execute the final deed of sale for Lot
3223-A, and prevent the Pingol spouses from committing acts of forcible entry and encroachment on
Donascos' land.
The Pingols countered in their answer that the sale was a conditional and not an absolute contract of
sale since the lot's price is to be paid on installment for a period of six (6) years which began on
January 1970. Second, they alleged that the sale was deemed canceled because Francisco breached his
(contractual) obligation way back in 1976 and the Donascos' continued occupation of Lot 3223-A is
due to mere tolerance. Lastly, the Donasco's action already prescribed.
The heirs of Francisco specifically denied the Pingols' allegations, stating that there's no provision for
cancellation in the sale contract due to default of paying monthly payments. They invoke the provisions
of Art. 1592 in the New Civil Code.1
The RTC Caloocan rendered in its decision on 22 January 1990 dismissal of Donascos' complaint and
ordered them to pay PhP350 as reasonable monthly rental of the land from time of complaint's filing,
PhP10,000 attorney's fees and costs of suit. The trial court held that deed signed by Francisco Donasco
and Vicente Pingol is a contract to sell and not of an absolute sale as Vicente Pingol had no intention to
transfer the land's ownership until it is fully paid. The said RTC also upheld the claims of the Pingols as
to the contract's cancellation and status of the Donasco's occupation of Lot 3223-A.
1 Article 1592 of RA 386 (The New Civil Code) states: In sale of immovable property, even though it
may have been stipulated that upon failure to pay the price at the time agreed upon the rescission of
the contract shall of right take place, the vendee may pay, even after the expiration of the period, as
long as no demand for rescission of the contract has been made upon him either judicially or by a
notarial act. After the demand, the court may not grant him a new term.

The Donascos appealed the trial court's judgment to the Court of Appeals (CA). It reversed the RTC's
judgment via its 12 November 1991 decision which said that Vicente Pingol cleared intended to divest
ownership of Lot 3223-A, that the failure to pay the land's agreed price is not a ground for the sale
contract's cancellation and lastly, that the action instituted by them is akin to quieting of title which
does not prescribe.
Issues raised and the decision of the Supreme Court
On 9 January 1992, the Pingols filed petition for certiorari as they were dissatisfied with the CA's
decision.
1. Whether the contract was that of an absolute and not a conditional sale, despite stipulations like
payment via installment of the lot's price for a fixed period of time?
The Supreme Court held that the contract executed by Francisco Donasco and Vicente Pingol was that
of an absolute sale, which indicated Vicente's clear intention of transferring ownership of the disputed
property. The contract clearly stipulated that Vicente through a DEED OF ABSOLUTE SALE OF
ONE-HALF (1/2) [OF] AN UNDIVIDED PORTION OF A PARCEL OF LAND sold and conveyed
the said property to Francisco Donasco (VENDEE) as well as to his heirs, assigns and successors-ininterest.
2. Whether the contract can be cancelled by Pingol spouses since the land's agreed price was not
paid by Francisco Donasco?
The Supreme Court used the provision of Article 1592 of the New Civil Code for the grounds for
rescission or cancellation of a sale contract involving an immovable property. 2 Since there was no
judicial or notarial action for rescission done by Pingol as found by the trial court or the Court of
Appeals and that there was no demand for such recission, Pingol cannot recover title to the land sold.
3. Whether the action instituted by the Donascos was quieting of title that does not prescribe?
The Supreme Court held even if the case filed by the Donascos is for specific performance, it the action
is really for quieting of title. It held that the Pingols' refusal to honor the payment made by the
Donascos and that they are not to transfer the title and ownership of Lot 3223-A despite the deed of
absolute sale and delivery of the object, makes the action one for quieting of title. Thus, an action to
quiet title to property in one's possession (like that of heirs of Francisco Donasco) is imprescriptible.
The Court of Appeals' decision is AFFIRMED with modifications: The Donascos are to pay the
balance of PhP10, 161 and its interest computed from 6 January 1976 on the legal rate (of interest). The
Supreme Court also ordered the Pingols that upon full payment of the balance and interest, deliver their
land's TCT 7435 so Caloocan City's Registry of Deeds can cancel it and issue two new titles one for
the Pingols and the other to the Donascos.
Doctrines
Commercial Law Sales, Divestment of ownership by delivery of thing subject of the contract:
The delivery divests vendor of the ownership over the contract's object and he cannot recover title
unless the contract is resolved or rescinded pursuant to Article 1592 of the New Civil Code.
Civil Law Property, Exemption of Family Home from Execution: A family home constituted after
a debt had been incurred is not exempt from execution because it is to protect the creditor against a
2 See Note 1 above.

debtor who may act in bad faith by resorting to such declaration just to defeat the claim against him. If
the purpose is to protect the creditor from fraud, it would be immaterial if the debt incurred be
undisputed or inchoate, for a debtor acting in good faith would prefer to wait until his case is definitely
decided before constituting the family home.
Civil Law Property, Quieting of Title - A vendee in an oral contract to convey land who had made
part payment thereof, entered upon the land and had made valuable improvements thereon, is entitled
to bring suit to clear his title against the vendor who had refused to transfer the title to him. It is not
necessary that the vendee has an absolute title, an equitable title is sufficient to clothe him with
personality to bring an action to quiet title. An action to quiet title to property in one's possession is
imprescriptible.